July 10, 2008
YRC Worldwide Freezes Pension Plan, Prepares to Introduce New One
By Randolph Heaster, The Kansas City Star, Mo.
Jul. 10--YRC Worldwide Inc. has frozen a pension plan for about 6,000 nonunion employees as it prepares to introduce a plan to cover all 17,000 members of its nonunion work force.The freeze on benefit accruals for those workers began July 1, and a new plan is expected to be launched in January.
Bill Zollars, YRC's chairman and chief executive officer, said the size of the company's nonunion work force had more than tripled the past several years through acquisitions of other trucking companies.
"That has resulted in us having nine different pension plans for our nonunion people," Zollars said Wednesday. "We want to establish one plan that's equitable for everybody."
That will result in administrative cost savings for the company as well as eliminate benefit inequities resulting from the different pension plans, he said.
Zollars said the freeze affected only about 35 percent of YRC's nonunion employees because a new pension plan was introduced in 2004 that covered new employees. Nearly 1,000 area YRC employees are affected by the freeze on their benefits accrual, he said.
Even with the freeze, the affected employees' ages and lengths of service will be accounted for in the new plan, Zollars added.
"What we're working on is a new plan that will supplement what's been accrued," Zollars said. "That's ... unique in that most new pension plans don't regard age and length of service. But given the seniority of our people, we think it's the right thing to do."
Zollars said the benefits under the new pension plan would be comparable to what employees had been receiving under the old plan.
"It should be close -- some may get a little more, some may get a little less," he said. "It will depend on the individual."
In other developments, three of YRC's biggest trucking units established some new route networks designed to speed up delivery and increase efficiencies.
Yellow Transportation, Roadway and USF Holland this week made operational changes agreed upon in the new Teamsters contract negotiated earlier this year.
Zollars said the changes should result in about 15 percent of shipments made by those carriers improving delivery service by one day through more direct routes and by freight changing hands less frequently.
The Teamsters agreed to create utility employees at various terminals to allow YRC's trucking units to become more flexible. The utility worker can load and unload freight as well as make deliveries.
Zollars said the changes would result in $40 million in annual cost savings combined for the three companies and also reduce driving within the networks annually by 20 million miles.
"We'll be able to speed up the network and reduce costs at the same time," he said. "It's a good thing for customers."
Meanwhile, overall business activity continues to be a concern for YRC.
"The economy has stabilized a little, but the wild card is fuel prices," Zollars said. "If it stays at current levels or goes even higher, we could be in for a few more months of rough sledding."
To reach Randolph Heaster, call 816-234-4746 or send e-mail to [email protected]
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