Business is business and Tim Nichols understands that, but that doesn’t make recent news any less stressful for the local Teamsters president.
Nichols, the head of Local 878, has 3,000 union members who work for 18 companies throughout the state. ArcBest Corp. of Fort Smith is leaning toward moving ABF Freight, its largest subsidiary, to Memphis, which would result in a major reduction of its operations in North Little Rock.
“It’s going to have a hell of an impact on a lot of folks,” Nichols said.
About 380 of Nichols’ Teamsters work out of the North Little Rock facility. For now they do, and maybe for the next 12 to 15 months, which is the timeframe ABF Freight CEO Roy Slagle gave union members for a possible move to Memphis or elsewhere.
Slagle met with Teamsters employees on May 28. Nichols said Slagle was there for all three shifts of employees and any worker who wanted to attend was accommodated.
Nichols said Slagle answered questions but didn’t shed any new light on the situation. Meanwhile, Nichols is dealing with his members, who are understandably concerned about a mass exodus of jobs.
“Right now everyone I have spoken to is in shock,” Nichols said on June 2.
Slagle told Teamsters business agent John Gale in an earlier meeting that the North Little Rock facility wouldn’t be completely shuttered but would have only 25 to 40 employees as a local distribution terminal after the relocation. The 380 current workers are a mix of hourly and salaried employees with an average pay of about $73,000 annually.
There’s no guarantee that all those 340 jobs would be moving to Tennessee. ABF Freight told the Economic Development Growth Engine for Memphis and Shelby County, an economic development agency, that it was committed to creating 283 new jobs at an average salary of more than $73,000 with the venture, which would result in an expansion of an existing terminal and the construction of a truck maintenance facility.
The news of the jobs departure hit like a bombshell, Nichols said. He spoke earlier about how Local 878 and North Little Rock were synonymous because of the long association, and how some members are second- or third-generation employees.
ArcBest would have to file with the union for a change of operations, something it did to close 30 terminals in the past year. Among the terminals that closed were ones in Russellville and Harrison.
The company told Nichols the employees in North Little Rock would be given the opportunity to follow the jobs to Tennessee. Nichols said the company would be required to pay moving expenses and 90 days of housing allowance to any union member who went east.
That’s easier said than done, though, Nichols said, because it’s not just the union member who would be moving; in many cases, it would also be his or her family. That means spouses would leave jobs, children would change schools and leave friends, families would move away.
“It would place a lot of burden on a lot of folks to abandon family farms or uproot spouses,” Nichols said. “I have not spoken to anybody who has made a firm decision.”
Nichols said there is almost nothing the union can do to prevent the move if ABF Freight wants it, as the company has said it intends to do. A meeting between the Teamsters and Gov. Mike Beebe resulted in the state asking ArcBest to consider a move to West Memphis instead.
That would keep the jobs in Arkansas, of course, but workers in North Little Rock would still be just about as far away from the new facility.
The EDGE group in Memphis offered ABF Freight a $4 million PILOT — the acronym stands for payment in lieu of tax — incentive to relocate and expand a distribution center. ABF Freight, which made a presentation for the incentive, told EDGE it would buy two adjoining lots and increase the size of the terminal from 42,000 SF to 138,000 SF.
ABF Freight’s desire to move — especially to the logistics hub that is Memphis — is part of its recent streamlining. The company closed eight terminals in 2013 and 22 more since the start of this year, those moves being one of the first actions taken after a labor agreement between ArcBest and the Teamsters was finalized in November.
“All the trucking companies we deal with, it is a constant struggle competing with Memphis,” Nichols said. “Memphis has so many advantages logistically.”