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This story appears in the Jan. 13 print edition of Transport Topics.

The Teamsters union said employees at YRC Worldwide Inc. have turned down a contract extension proposal that the company said was critical to refi-nancing its debt and assuring long-term stability.

The union announced the results of the vote Jan. 9, saying on its website that 61% voted down the plan.

A total of 26,000 union members at the less-than-truckload carrier were eligible to vote on changes that would extend their contract into 2019 from March 2015.

Approval by the union of a memorandum of understanding to extend the contract was a requirement for the company to finalize a $300 million debt refinancing plan, announced Dec. 23, with the goal of lowering interest costs.

“The Teamsters union believes in democracy, and we’ve let the democratic process take its course,” said Tyson Johnson, director of the Teamsters National Freight Division. “Our members have made huge sacrifices to keep this company alive, and a majority made the decision not to sacrifice anymore.”

The mail voting began after local leaders cleared the way for that process to begin Dec. 6.

“While we are disappointed in the outcome of the vote, we believe that timing of events related to our refinancing did not work in our favor,” YRC Worldwide CEO James Welch said. “We will keep our customers, employees and stakeholders advised of our efforts.”

After a report late last week on the Teamsters for a Democratic Union website that suggested the revisions might be rejected, YRC shares fell 16% late Jan. 9 to $15.67. Prior to that day, the stock had more than doubled since the Dec. 6 announcement.

Based in Overland Park, Kan., YRC ranks No. 5 on the Transport Topics Top 100 listing of the largest for-hire carriers in the United States and Canada.

Interest on the carrier’s debt was $124.2 million over the first nine months, swallowing up profit before interest and taxes of $30 million over the same period.

YRC’s debt totals about $1.4 billion. Reports by Bloomberg News last week said the company had arranged new financing for the remaining $1.1 billion of its obligations in the event that YRC’s workers approved the deal, without saying who provided that information.

YRC’s operations have resulted in losses since late 2007, and union members have been working at 15% lower wages for more than three years.

Since management changed and CEO James Welch re-turned to the company in mid-2011, YRC improved its results in every quarter, compared with the prior year, until the third quarter.

In that quarter, profit before interest and taxes slipped to $5.8 million from $27.3 million in the 2012 period, largely as a result of an operational change that raised costs at YRC Freight, the national trucking unit.

The $300 million debt reduction has multiple parts. Some investors agreed to give YRC $250 million in cash and accept 16.7 million newly issued shares. Another $50 million would come from converting some senior notes to stock.

Chief Financial Officer Jamie Pierson said last month the refinancing would enable YRC to reduce interest rates on its debt, thereby lowering interest expense. No estimate of those savings has been disclosed yet.

In addition, the company has to convince 90% of holders of $124.3 million in pension-related debt to sign on to the debt-reduction plan outlined last month.