February 13, 2007

(Washington, D.C.) – Teamster local union leaders who represent carhaul workers unanimously approved a plan Monday, February 12, by a private investment firm to reorganize Allied Holdings that would protect members' pensions, health and welfare benefits and preserve the union contract, Teamsters General President Jim Hoffa announced.

Allied, the largest carhaul company in North America, employs about 3,300 Teamsters in the United States.

The three-year plan from Yucaipa Cos. requires approval from the U.S. Bankruptcy Court in Atlanta and must be ratified by Teamster members. The plan would adopt economic concessions far less drastic than proposed by Allied's present management. It will preserve members' pensions and health and welfare benefits, with no changes to work rules or contract language. The proposal also calls for the appointment of a new board of directors and CEO on the effective date of the plan.

On February 2, Allied filed a motion in bankruptcy court seeking to nullify the contract and asking for a reduction of $65 million per year for five years for a total of $325 million from its Teamster employees. Wage concessions in the Yucaipa plan would be 15 percent total over three years, not to exceed $35 million per year. All those funds would be used to purchase new equipment to be used by Teamsters at Allied.

"Allied CEO Hugh Sawyer told our members that if they don't do what he says, he will shut down the company," Hoffa said. "We have been working with Yucaipa to develop this responsible alternative that will protect our members' futures. We fought to protect Teamster jobs, pensions and health and welfare benefits. I'm proud to say we accomplished those goals."

"We have been fighting to make sure our members are protected since well before Allied's bankruptcy filing in July 2005," said Fred Zuckerman, Director of the Teamsters Carhaul Division. "Our members stuck with us the whole way, including their unanimous approval of a strike vote last June. Our members were adamant about not letting the company continue shelling out management bonuses while members made sacrifice after sacrifice."

Zuckerman said the union will present more specifics of the Yucaipa plan to members in the coming days, including membership meetings beginning this weekend. A ratification vote must be completed by the end of March.

"This reorganization plan, though painful, is a bold, innovative solution that's good for our members," Zuckerman said. "We worked strategically with Yucaipa to protect our members' jobs, their health, welfare and pension benefits and their working conditions."

Yucaipa Facts Find out more about the investment company and its founder Ron Burkle

Highlights of the Yucaipa plan:

• Allied will pay all health, welfare and pension contributions and any increases while the three-year plan is in effect;



• Total concessions are 15 percent, not to exceed $35 million a year for three years. All those funds will be spent on purchasing new equipment to be used by Teamsters at Allied;



• Management and non-bargaining unit employees' wages will be frozen for the period of time Teamster wages are frozen with few exceptions;



• If Allied exceeds certain EBITDA (earnings before interest taxes depreciation and amortization) targets, the company will return money to members;



• Reorganized Allied will rejoin the National Master Automobile Transporters Agreement (NMATA), will sign successor to NMATA and will rejoin the Employer Association;



• All of Allied's operation will remain "covered work" under the work-preservation agreement with a small exception for non-union AXIS. During the first 90 days after the plan takes effect, the union and the company will agree on which parts of Axis will become Teamsters, or whether the non-union parts will be sold;



• Concessions cannot be used to compete with NMATA carriers and can only be used to bid on new business; and



• Teamsters General President Jim Hoffa may appoint a representative to attend Allied board meetings as an observer to monitor the financial performance of the company. Allied will pay up to $10,000 per year for an independent auditor assigned by the Teamsters National Automobile Transporters Industry Negotiating Committee (TNATINC) to audit the performance of the business.



• A new CEO, acceptable to the Teamsters, will be hired.

Founded in 1903, the Teamsters Union represents more than 1.4 million hardworking men and women in the United States and Canada.