Saturday, October 31, 2015

XPO closes purchase of Con-way; layoffs begin within Con-way system

http://www.dcvelocity.com/articles/20151030-xpo-closes-purchase-of-con-way-layoffs-begin-within-con-way-system/

More than 10 percent of workforce is cut at HQ, IT center, source says; rebranding to XPO name takes effect.

By Mark B. Solomon

It wasn't long after XPO Logistics Inc. announced today that it had finalized its $3 billion acquisition of trucking and logistics provider Con-way Inc. that the bloodletting began at Con-way's headquarters in Ann Arbor, Mich., and elsewhere.

XPO will cut more than 10 percent of Con-way's workforce at Ann Arbor and at its Portland, Ore.-based technology center, according to an individual familiar with the situation. Between 2,500 and 3,000 employees work at both locations, the individual estimated. Included in the cuts will be an entire layer of Con-way upper management, whose elimination will save its new owner about $28 million a year; the managerial segment was not adding much value to the organization, according to the individual.

Also on the chopping block is an 80-person group devoted to developing and implementing "lean" management principles, an ambitious efficiency program that Con-way has championed for years. Shortly after the deal was announced in early September, Bradley S. Jacobs, Greenwich, Conn.-based XPO's chairman and CEO, met in Ann Arbor with leaders of the project and came away dubious that the benefits of the work justified the size of the current headcount, according to the individual.

The individual said that Con-way's drivers are likely not included in the layoffs. It is also unclear whether there will be further rounds of cutbacks

Executives who remain with XPO will be required to sign a two-year noncompete agreement, the individual said. The requirement could result in an exodus of top-level employees, who may wish to stay, but may worry they will find their hands tied should they subsequently find opportunities elsewhere in the industry.

The cuts, which had been expected internally for weeks, include employees in administration, operations, sales, and information technology, according to the individual. XPO declined comment other than a statement from Jacobs in announcing the deal's close that "we're moving quickly to eliminate redundancies and leverage our scale to better serve our more than 50,000 customers." At the time the deal was announced, XPO pledged to improve Con-way's operating profit by up to $420 million over the next two years. Part of that will come from cost cuts.

Con-way's four operating divisions—Con-way Freight; truckload carrier Con-way Truckload; third-party logistics-services provider Menlo Worldwide Logistics; and freight broker and intermodal marketing company Con-way Multimodal—have been rebranded as XPO Logistics. Menlo and Con-way Multimodal will be immediately integrated into existing XPO Logistics units operating in identical segments. Con-way Truckload, which as Contract Freighters Inc. was bought by Con-way in 2007 for $750 million and which today might fetch a little more than half that, will likely be sold for what Jacobs believes is the right price. He has said the unit might have value as a hauler of brokered freight.

Jacobs said earlier this month that XPO had received three unsolicited offers for Con-way Truckload. He wouldn't identify the bidders or the price of each offer.

Con-way Freight generates about $3.3 billion in annual revenue, which is more than half of the parent's $5.8 billion in revenue. It is known for providing excellent customer service, but in recent years has struggled to operate efficiently, or as profitably as many investors would like. Con-way Freight has specialized in the premium segment, where time in transit is compressed and service levels are relatively high. However, about three-quarters of LTL traffic moves in slower, more economical services, an area where the unit had little, if any, involvement.

Jacobs said earlier this month the new LTL unit will focus far more on the economy category, and could leverage the network of the former Pacer International, an intermodal provider with a great deal of equipment that XPO acquired in early 2014.

XPO has engaged recruiting firm Spencer Stuart to find a replacement for Joseph M. Dagnese, the head of Con-way Freight, who had been expected to leave the company at the time the deal closed. The complexity of integrating Con-way, and in particular positioning the LTL unit for future success, means that XPO will take its foot off the acquisition brake for at least a year, Jacobs said recently. Through 17 acquisitions in the past four years as well as internal expansion, XPO has gone from a company that didn't exist in late 2010 to a $15 billion firm today.

Thursday, October 29, 2015

Hoffa Joins Port Truck Drivers Strike At Long Beach/Los Angeles Ports

https://teamster.org/news/2015/10/hoffa-joins-port-truck-drivers-strike-long-beachlos-angeles-ports

(Long Beach, Calif.) - Today, Teamsters General President Jim Hoffa joined port truck drivers, warehouse workers, community and faith allies, and Teamster officials at a press conference at ITS marine terminal at the Port of Long Beach.

The workers and Teamster officials announced that misclassified “independent contractor” drivers at Chinese-owned port trucking company Intermodal Bridge Transport (IBT) filed a petition to be recognized first as employees, and to be represented by the Teamsters. IBT driver Jose Portillo reported that the company official who received the petition threw it on the ground and the workers walked off the job on strike. This is their second strike.

The Teamsters also entered into a new partnership with the Warehouse Workers Resource Center, including support for Cal Cartage warehouse workers who announced the intent to go on strike starting Wednesday morning Oct. 28.

Teamsters General President Jim Hoffa released the following statement: The misclassification of workers, and the devastating wage theft, ends here. Yesterday I visited with supply chain workers who haul imports and exports to and from the docks at our nation’s largest port, and with the warehouse workers who unpack and reload items onto trucks destined for major retailers like Amazon and Walmart. Every one of these egregiously exploited workers shared stories of their inhumane working conditions and their determination to fight back, not just for themselves but for all of their supply chain co-workers. I told them “You have the support of the 1.4 million Teamster members. We will bring justice to port truck drivers and warehouse workers nationwide!”

Teamsters Vice President Fred Potter made the following announcements: “This morning, a majority of misclassified independent contractors at Intermodal Bridge Transport (IBT) presented a demand to be recognized first as employees, and to be represented by the Teamsters. Upon receiving no word back, they took up their picket signs and went on strike against the company’s unfair treatment. They demanded a dignified and safe working environment; demanded that the company immediately repair all unsafe trucks and ensure every truck has a functioning Air Conditioning unit; and demanded access to a dignified break room with clean drinking water, proper restrooms, and a place where we can prepare their meals and rest during their long days at work. This is the first time in American history that workers misclassified as independent contractors have simultaneously demanded their rights as employees and their right to form a union.”

“Wage theft isn’t just about misclassification. It’s about workers who are supposed be paid a living wage – and they’re not, Potter said. "And that is happening right here on port property, at the Cal Cartage warehouse, where the company is violating the City’s living wage ordinance. We support these workers and pledge to stand with them throughout their fight to help them secure dignity, respect, and fair day’s pay for a hard day’s work."

On Monday, Oct. 26, port truck drivers misclassified as “independent contractors” began their eighth “Unfair Labor Practice” strike at America’s largest port complex, the twin ports of Los Angeles/Long Beach. The striking drivers included those misclassified as “independent contractors” by Pacific 9 Transportation (Pac 9), who have been on an indefinite strike since July this year for 15 straight weeks, and those employed by global giant XPO Logistics (NYSE: XPO), which has spent $7.34 Billion in the last year expanding their reach in the global supply chain.

On Tuesday, Oct. 27, misclassified drivers from Intermodal Bridge Transport (IBT) began their second Unfair Labor Practice strike after delivering a petition for improved working conditions, recognition as employees, and to be represented by the Teamsters. These drivers are on strike to protest unfair labor practices, including misclassification and retaliation, harassment, and intimidation for having filed claims for wage theft with the California Labor Commissioner’s Division of Labor Standards Enforcement.

Today, California Cartage warehouse workers announced that they will be on strike starting Wednesday. In the past year, workers at this warehouse have come together to demand an end to wage theft, unsafe conditions, and irregular schedules at a massive warehouse at the Port of Los Angeles. These workers, who have been coming together with the support of the Warehouse Worker Resource Center, now have the support of the Teamsters Port Division, which has been fighting for justice at the Ports of Los Angeles and Long Beach for many years.

“I have worked at Cal Cartage through a staffing agency for years. I’m going on strike because the company is trying to intimidate workers who ask for basic health and safety, good wages and permanent jobs,” said Anthony Vallecillo, a Cal Cartage worker from Wilmington.

Picketing will occur starting Wednesday, October 28, from 7:30-8:30 and 4-5 pm at 2401 E. Pacific Coast Highway, Wilmington, CA, and from 9-5 at Sepulveda and Middle Road, Wilmington, CA 90810.

BACKGROUND ON MISCLASSIFICATION: As America’s lowest wage workers are beginning to see justice with a $15 hourly wage on the horizon, the cries of the millions of American workers who are misclassified as “independent contractors” are reaching a fevered pitch. Spanning employees in the janitorial, e-commerce, entertainment, home care, construction, port truck driving industries these workers are not only robbed of basic workplace protections like the right to minimum wage, overtime pay, and a safe and healthful workplace, but they are also being cheated out of such rudimentary workplace benefits as unemployment compensation when they are laid off; workers’ compensation when they are injured on the job; and the right to form a union have a voice on the job – a voice that allows workers to gain respect, dignity, and the ability to bargain collectively for better wages and working conditions. Misclassification robs workers of these rights.

As “independent contractors,” workers do not have the ability to engage in group activity to protest and resolve workplace issues. Further, misclassification deprives workers of protections afforded “employees” under the National Labor Relations Act (NLRA). Port drivers are on the front line challenging this unfair labor practice by filing charges with the National Labor Relations Board alleging that misclassification itself violates the NLRA (as does retaliation for filing wage and hour claims”).

WAGE THEFT: Employees illegally misclassified as independent contractors are also victims of pervasive wage theft that robs workers of billions of dollars a year. Misclassifying drivers enables trucking companies to shift their business expenses on to the backs of low wage workers who are controlled by the trucking company that employs them. Predatory truck lease schemes bind drivers to their employer. Companies deduct the cost of diesel fuel, insurance, maintenance, parking, even the cost of printing paychecks, leaving drivers with very little or even negative paychecks. Studies have shown that the average port truck driver is subject to $4,000 per month, or $48,000 per year, in wage theft. Without the ability to fight back at their workplace.

TAX FRAUD: Misclassification doesn’t just hurt the workers and their families – it hurts us all through pervasive and wide scale tax fraud that robs our schools, our roads, our public safety services of billions in vital resources.

THE FRONT LINE: On the front line of the fight to end the misclassification/wage theft scheme are the professional truck drivers at our nation’s largest port complex – the twin ports of Los Angeles and Long Beach, who haul everyone’s cargo, including Amazon, Costco, and Proctor & Gable. Nearly one-half a trillion dollars in goods per year flow through these ports – more than 40 percent of U.S. imports and exports – yet the men and women who haul these containers on and off the docks to nearby rail yards, distribution centers, and warehouses are denied employee rights. By striking and filing unfair labor practice charges port drivers are fighting back!