Based on the press release, it looks like the union doesn't want to give ABF management the breaks they want to get more competitive. You can read the release at teamstersdotorg. It said in part:
"The Teamsters National ABF Negotiating Committee met with ABF this week in Dallas, and the committee is disappointed with the company’s initial economic proposals. The company’s economic proposal seeks significant
reductions in health and welfare and pension benefits as well as deep wage cuts. For example, the company closed the week seeking an across-theboard 6.5 percent wage reduction as well as reductions in both the scope and level of health and welfare coverage available to employees.
In terms of health care, the company is seeking: 1)the elimination of coverage for employees working fewer than 130 hours in a month; 2) employee copays including a $240 per month employee contribution for family coverage; 3) significant increases in out-of-pocket employee costs; and 4) overall reduced benefits.
Likewise, the company’s pension proposal reduces and caps the amount of contributions it would make to most pension funds...."(more)
Not to debate the merits and levels of pay cuts, healthcare changes and retirement benefits, the union also knows ABFS cannot be profitable with the current labor cost structure. The market is pricing this indecision into the current share price. When we have a resolution, hopefully by the end of this month (one week), institutions will re-price the shares higher based on more certainty. My sense is that neither party wants the company to go under, and that there will be some compromise on both sides.
Joe you may have missed the last update. The contract negotiations have been extended again until the end of May. The good news is the market for ABFS stock seems to have accelerated with the union contract news update. I am guessing the market now has a sense of what the company is asking for in concessions and likes it. Since the first of Dec. this stock has been under considerable accumulation. Up verus down volume is roughly a positive 8 million shares or nearly 1/3 of outstanding shares.
When a teamster is sick they know they need to take that nasty tasting medicine so they can get better, but it doesn't mean they will like it. Nobody likes to take wage and benefit reductions. In the non-union private sector, companies have been increasing monthly medical charges for health insurance or eliminating health coverage for years. The monthly fee of $240 per family ABFS is asking for health insurance is quite frankly in line with other companies charges. Many people would line up to get that kind of coverage. Many companies no longer have any kind of pension plan. Without concessions the pension fund will run dry and teamsters will have no pension. In 2010, union management knew ABFS needed concessions and agreed. The rank and file voted it down in a 54% to 46% vote. Union management knows concessions need to be made for a viable long term company to exist. Without concessions, labor will have to be cut drastically for any chance of the company surviving. If a labor strike occurs, the teamsters better line up another job quickly which undoubtedly will be at lower benefits and wages. The freight will go to non-union carriers overnight.