by Chris Bahn
Posted 6/28/2013 06:26 am
Updated 1 year ago
Employees from the International Brotherhood of Teamsters have approved a five-year contract with ABF Freight System Inc.
A majority of the ballots counted from more than 6,100 of the 7,500 Teamsters employed by ABF were cast in favor of the collective bargaining agreement and 21 of 27 supplements to the contract. Those remaining supplemental agreements are tied to local work rules and "other technical items."
All remaining issues will be worked out before the deal goes into place nationwide, the Teamsters said.
Investors clearly liked the news. Stock in ABF's parent company, Arkansas Best Corp. of Fort Smith (Nasdaq:ABFS) opened at $22 a share this morning, up 10 percent from Thursday's close, and was trading as high as $23 early Friday morning.
"We understand the sacrifices our ABF members are making," said Gordon Sweeton, co-chairman of the National ABF Negotiating Committee (TNFINC). "We will work on obtaining approval of those supplements that were not approved."
Included in the contract is an immediate 7 percent wage reduction, but the Teamsters note in a news release that the money will "be entirely recouped by the fifth year of the five-year contract."
Arkansas Best Corp. said in its own news release (PDF) that the agreement would help return its business to "historic profitability."
"As we near the end of this contract negotiation process, we are looking forward not only to a more efficient, profitable ABF but also to continued strong contributions from our non-asset-based, emerging businesses," Arkansas Best CEO Judy McReynolds said.
"With the addition of premium logistics provider Panther Expedited Services a year ago and continued investments in technology and people, our emerging businesses are all poised for additional revenue growth and greater cross-selling opportunities both within our existing ABF customer base and throughout the broader transportation marketplace," she said.