YRC's Skarka Steps Down as Head of Yellow Truck Brand

YRC Worldwide Inc., the U.S. trucking company that had a $736 million fourth-quarter loss, said Maynard Skarka is retiring as president of Yellow Transportation, one of its largest brands.

Michael Smid, president of YRC's North American Transportation division, will take over from Skarka, the Overland Park, Kansas-based company said today in a memo to employees. Skarka is 55 years old and had been with Yellow since 1982, according to YRC's Web site.

The move follows job cuts and terminal shutdowns announced in February at another unit as YRC takes steps to stem losses and restore revenue growth. Smid has been president since October of YRC's North American Transportation division, which includes Yellow. More changes at YRC may be coming, he said in an interview.

``Our focus must be to provide the service quality our customers expect while we carefully manage cost and build for the future,'' Smid said in the memo to employees. He said the company is stepping up efforts to ``change our current growth trajectory.''

Smid, 52, retains his role as chief of North American Transportation.

``I would expect us to continue to try to improve our performance,'' Smid said in the interview. ``And sometimes that does involve organizational changes.''

Increasingly Competitive Market

YRC rose 32 cents, or 2.5 percent, to $13:12 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The shares have lost 23 percent this year, the worst performance on the five-member Standard and Poor's Midcap Trucking Index.

Smid previously held various executive positions with YRC's national trucking divisions, which carry so-called less-than- truckload freight, or shipments from more than one customer in each truck.

``Smid has done a good job in the past for YRCW regional with integrating some of the new operations,'' Credit Suisse analyst Jason Seidl said in an interview. ``He's going to have his hands full as Yellow tries to compete in an increasingly competitive long-haul LTL market. Clearly they're in the cross hairs of the likes of FedEx, UPS and Con-way.''

The move is a vote of confidence for Smid rather than against Skarka, Seidl said. Seidl, based in New York, rates YRC shares ``neutral.''

The company is the largest U.S. trucker by sales, with $9.62 billion in 2007 revenue.

Difficult Position

YRC National Transportation lost $56.9 million in the fourth quarter and accounted for 70 percent of YRC's fourth- quarter revenue. Last year YRC stopped reporting revenue separately for Yellow and Roadway, the other major national brand. YRC made no management changes at Roadway today.

The company announced plans in February to reorganize its regional units by closing 27 terminals and cutting 1,100 jobs. The regional division provides a quarter of YRC's revenue and accounted for the majority of the fourth-quarter loss.

Chief Executive Officer Bill Zollars's job could be at risk if the reorganization fails to improve YRC's profit, Seidl said.

``If the company is not up to the challenge and they have problems with their covenants, he might be put in a difficult position,'' Seidl said. ``However, if they're able to pull off the regional turnaround and come through the economic downturn unscathed, he should be fine.''