Teamsters to Oppose Allied's Motion to Tear Up Union Contract

WASHINGTON, Feb. 4, 2007 /PRNewswire-USNewswire/ -- On Friday, February 2 Allied Holdings filed a motion asking that Atlanta Federal Bankruptcy Judge C. Ray Mullins rip up the contract between the Teamsters and Allied and allow Allied to implement the millions in wage, benefits and work rule concessions that they have been demanding for the past several months. Allied, North America's largest carhaul company, filed for Chapter 11 reorganization in July of 2005.

Teamsters National Carhaul Director Fred Zuckerman responded angrily to the Allied move. "For the past several weeks we have been holding talks with Allied in an effort to develop a fair and equitable plan that would allow the company to come out of bankruptcy. For Allied Chairman Hugh Sawyer to now file this motion to set aside our contract shows they were never serious about negotiating a solution but instead want to have their loyal and hardworking employees pay dearly for his mismanagement of the company."

Zuckerman taped a recorded message to all Teamster members employed at Allied saying "we must be prepared to take appropriate action should the judge rip up our contract." Last June all 60 Teamster locals with Allied members voted overwhelmingly to give the union authorization to strike Allied if the contract was voided. Zuckerman also said that Teamster lawyers and financial experts would vigorously oppose the Allied motion in front of Judge Mullins next week.

Allied's Proposed Cuts

Allied is asking for a total reduction of $65 million per year for five years for a total of $325 million from Teamster employees.

  The main highlights of the Allied proposal are:

   1. Eliminate all future wage increases and cost of living increases.
      Eliminate all future health, welfare and pension increases.

   2. Impose a 2.8% wage reduction for all drivers (or 0.55% in the case of
      brokers, taken from the percentage of revenue). These wage cuts are
      frozen in place for four years.

   3. Eliminate all Teamster health plans.  Employees will be offered a
      company health plan.  Allied's cost for the health care plan is capped
      at 74%, so employees will have to pay 26% of the monthly premium cost.
      Allied will not pay contributions for dates when the employee is
      absent without pay or on workers' compensation.

   4. Eliminate all Teamster pension plans.  Establish a 401(k) with a 2%
      monthly contribution.

   5. Make the following work rule changes:
       a. A minimum national productivity standard of 45 on the driver
          scoreboard.
       b. Unlimited ability to backhaul without restrictions on drivers or
          equipment.
       c. Unrestricted ability to bundle loads.
       d. Redomiciling drivers based on customer volume or service
          requirements.
       e. Make the modified work (light duty) program mandatory for all
          employees on workers' compensation.

   6. Combine all of these changes into a new, five-year contract that would
      not expire until March 31, 2012.

"This motion by Allied is an insult to our members," declared Zuckerman. "Hugh Sawyer and his so-called management team have spent more time trying to figure out ways to collect retention bonuses than developing a serious plan to come out of bankruptcy. Now, at the last minute, they propose gutting our contract and making our member's pay for their errors. We will explore every possible action to make sure their plan is defeated."

To see Allied's filing go to www.teamster.org/divisions/Carhaul/pdfs/070203_alliedmotion.pdf

For more information go to www.teamster.org and click on the Allied button or go to www.teamster.org/divisions/Carhaul/alliedbank.asp

Leigh Strope, (202) 497-7766