TNT Unions Don't Find Labor Pact; Strikes Loom

[TrueBlueTerrier]

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THE HAGUE TNT NV's struggling mail unit may be facing strikes after unions said Monday they haven't found an alternative for a new collective labor agreement with the Dutch postal and express group.

At a press conference, union representatives said they haven't found an alternative for the labor agreement they had struck in principle with the company earlier this year, which was rejected by union members in April. Since then, the unions had been considering other options for the 23,000 postal workers at TNT Post in the Netherlands.

The problems at TNT's mail business are too urgent and can't be solved without forced redundancies and drastic cost cuts, union representatives said. They added that their members now have to make a choice: either they accept tougher working conditions in exchange for job security; or they keep their current salaries but risk losing their jobs.

The members will be asked to give their opinions on the issue through a referendum, the unions said, adding that the outcome will be the subject of further negotiations with TNT.

TNT Post has been hurt by declining mail volumes due to rising competition from electronic mail, and is also losing market share following the liberalization of the Dutch mail market earlier this year.

"The problem has continued to grow, making it even more essential to take action on costs," TNT said in a statement. The company added that it hopes to resume talks with the unions as soon as possible "with the aim of avoiding as many compulsory redundancies as possible."

If a deal can't be reached, TNT is making preparations for a restructuring, which would include cutting 11,000 jobs over a period of one to three years. The firm aims to save EUR125 million a year with the new collective labor agreement, while costs would amount to EUR275 million. The target is part of plans to save EUR395 million annually from 2015.

According to unions, TNT's restructuring plan is too drastic and that cost-savings of EUR75 million a year should be enough and that only 3,500 forced redundancies are necessary. Therefore, negotiations with TNT Post will remain tough, they said.

"Regardless of the outcome of the referendum, it will be hard to reach an agreement," union representative Sander Martins said, adding that he isn't ruling out strike actions.

SNS Securities analyst Danny van Doesburg said TNT faces "a period of big social unrest" and cut his rating on the stock to "reduce" from "buy."

[chewi]

SNS Securities analyst Danny van Doesburg said TNT faces "a period of big social unrest" and cut his rating on the stock to "reduce" from "buy."

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