Despite a discouraging earnings forecast that sent Yellow Roadway stock tumbling, the trucking company's chief executive said Friday that he remains committed to maintaining jobs in Akron.
"Our focus will be in growing the business and so our focus would be in increasing the jobs in Akron," William Zollars said a day after announcing the need for better business practices at Akron-based Roadway Express.
The biggest part of the problem came from the installation of a new way to manage Roadway Express distribution terminals, he said. Productivity dropped at about 24 of 30 centers where products are consolidated and placed in trucks or taken off trucks and sorted for new destinations, he said.
"It went real well in five or six (terminals), one of which was in Akron, where productivity got better and efficiency went up," Zollars said. "But unfortunately for about two-thirds of the distribution centers, productivity actually dropped and the efficiency went down and that resulted in a shortfall in earnings for Roadway Express for the third quarter."
The Roadway unit posted record quarterly profit before interest and taxes of $52.2 million in the second quarter.
The company also announced Thursday that Michael J. Smid was promoted to president of Roadway Express, replacing Robert L. Stull. Smid was president of YRC Enterprise Services and chief integration officer.
Yellow Roadway said after the markets closed on Thursday that profit will be as little as $1.40 a share, compared with the $1.60 to $1.65 predicted in July.
Also contributing to about 5 cents per share of the reduced outlook is damage caused by Hurricane Katrina. Zollars said about 50 facilities in the gulf region were affected, but most are back up and running. Seven remain hindered, with three shut down, he said.
Yellow Roadway stock on Friday lost $3.20 or nearly 7 percent to close at $42.81.
Since the companies merged about two years ago, Yellow, based in Overland Park, Kan., and Roadway have operated as separate, competing entities with different trucks, different staffs and different rate schedules.
A lingering concern has been that Yellow Roadway would do what many other merged companies have done -- eliminate duplication and a lot of jobs. But Zollars said addition of jobs is more likely than cuts.
"We're still really focused on growing Roadway Express," he said. "Over time I think that we are going to continue to have more employees in Akron and not fewer."