The Teamsters union is close to a new national trucking agreement that will substitute cost-of-living protection for most fixed wage increases, sources familiar with the negotiations said yesterday.
The sources said the two sides, meeting in Chicago under a mutually imposed news blackout, probably will recess their talks this week and then return early next month to wrap up the contract, nearly three months before the current three-year National Master Freight Agreement expires April 1.
The Teamsters agreement would be one of the first major contracts in next year's new three-year bargaining cycle.
Union and industry officials vowed before talks began in earnest Dec. 1 to produce a moderately priced contract that would reduce labor costs in the financially pained trucking industry, which has laid off 120,000 Teamsters since 1980. Though a number of money issues still are outstanding, sources said yesterday that there has been agreement on the basic direction--to minimize direct pay increases while placing most of the wage burden on a cost-of-living-allowance (COLA) formula.
The COLA clause contributed $1.86 an hour to the total $17.25-an-hour wage package negotiated by the Teamsters in 1979. Cost-of-living allowances are paid on a semiannual basis under the current contract, a plan favored by many of the union's rank-and-file members. Negotiators have discussed the option to make the COLA payment annually, a change that could increase the cash flow of trucking companies by $100 million a year, according to a Business Week magazine report that was confirmed yesterday by union and industry sources.
There also have been discussions about using a part of the COLA payment to help cover the rising costs of health and welfare benefits provided by the master freight agreement. But it was unclear yesterday which, if any, of those two options was on the table.
According to preliminary proposals offered by carriers in the Midwest and West, copies of which were obtained by The Washington Post, some trucking managers are trying to save dollars by winning work rule concessions. For example, one proposal offered by Midwest carriers calls for "maximum flexibility with regard to pickup and delivery," which could allow long-distance drivers to bypass city transfer points and deliver their loads directly to a receiver.
That change could reduce shipping and carrier costs by eliminating the practice in which city drivers currently pick up loads from their over-the-road brethren for delivery to city customers. But the proposal is opposed by rank-and-filers, who argue that such a change would result in the loss of thousands of jobs for city drivers.