Friday, October 10, 2008

YRC Logistics in St. Louis closing, leaving 47 jobless

YRC Logistics Inc., a subsidiary of trucking and freight giant YRC Worldwide Inc. of Overland Park, Kan., is shutting down one of its operations in the St. Louis area and eliminating 47 employees.

YRC Logistics notified the Missouri Department of Economic Development about the job cuts in a Worker Adjustment and Retraining Notification (WARN) Act notice Sept 9. Keener Tippin, a Missouri Department of Economic Development spokesman, said the company will complete the layoffs next month.

Suzanne Dawson, a YRC spokeswoman, said YRC Logistics is making the job cuts because of changes in some contracts that the company has with two companies. One of those contracts, she said, involves Cincinnati-based Procter & Gamble Co.

YRC Worldwide has struggled since last year, reporting losses and laying off workers as it faces a slow economy and tries to speed up integration of two subsidiary trucking companies. Its chief financial officer of less than a year, Stephen Bruffett, resigned Aug. 14 to take a similar position with competitor Con-way Inc.

YRC Worldwide Schedules Third Quarter Conference Call for October 24, 2008

YRC Worldwide Inc. will host a conference call for shareholders and the investment community on Friday, October 24, 2008, beginning at 9:00am ET, 8:00am CT. Third quarter earnings will be released after the market close on Thursday, October 23, 2008.

Hosting the teleconference will be: Bill Zollars, Chairman, President and CEO, YRC Worldwide; Tim Wicks, Executive Vice President and CFO, YRC Worldwide; Mike Smid, President, YRC National Transportation; and Jim Ritchie, CEO, YRC Logistics.

The conference call will be open to listeners through a live webcast via StreetEvents at and via the YRC Worldwide Internet site

An audio playback will be available via the StreetEvents and YRC Worldwide web sites.

Thursday, October 09, 2008

YRC says it could face impairment charges

The beating YRC Worldwide Inc. stock took on Tuesday, when share values plunged about 30 percent, has the potential to take more air out of the trucking company’s value.

In a Wednesday filing with the Securities and Exchange Commission, the Overland Park-based carrier said that because of its current market capitalization — $285.3 million before the markets opened on Wednesday — and current economic conditions, it may face a goodwill and trade name impairment for its National Transportation division, trade name impairment for its Regional Transportation division and goodwill impairment for its YRC Logistics division.

YRC is conducting tests of the assumptions and expects to determine any impairment charges when reporting its third-quarter financials, the filing said. Any impairment would be noncash and not be included in YRC’s credit facility and asset-backed securitization facility leverage ratio calculations, the filing said.

Jon Langenfeld, an analyst with Milwaukee-based R.W. Baird & Co., said in a research note Tuesday that “bankruptcy concerns are mounting” for YRC “with the stock down 44 percent over the past week.”

“Bankruptcy is not imminent, but deteriorating trends could force changes,” the note said. “While (fourth-quarter) covenant violation is possible, several quarters of worsening trends are needed to force an outright bankruptcy. Further, a covenant violation would likely precipitate a short-term waiver from lenders.”

YRCW has a $4 billion off-balance sheet liability for the Teamsters’ Multi-Employer Central States Pension, Langenfeld said in the note.

“Bankruptcy would likely be a low priority for lenders given the potential claim on assets by the Teamsters,” the note said. “Tangible book value is only $360 million.”

Just after the markets closed on Tuesday, YRC tried to reassure shareholders by releasing a statement emphasizing that the company would have positive free cash flow in the third and fourth quarters, pay off “significant” debt this year and probably remain in “full compliance” with credit agreement terms.

YRC shares closed at $4.98 on Tuesday after having opened at $7.14. A month ago, share prices were close to $19.

On Wednesday, the stock closed at $6.32, up $1.34, or 27 percent, on volume of 7.1 million shares, according to Yahoo Finance. The stock’s average daily volume the past three months is 2.2 million shares.

“With more than $9 billion in annual revenue and comprehensive networks in the national and regional markets, we continue to provide excellent service to our customers each and every day,” Chairman and CEO Bill Zollars said in the Tuesday release. “Despite the continuing unrest in the broad financial markets, our current financial position is solid, and we remain well-positioned to weather this economic environment.”

YRC already has had to write down values of some assets.

In January, YRC reported one-time goodwill impairment charges of $782 million in the fourth quarter, stemming mostly from a drop in the estimated value of the former USF Corp. companies, which YRC bought for $1.5 billion in 2005. They make up most of the Regional Transportation unit.

Military families, union members work for Obama win in Virginia

Stacie Burgess, wife of an active-duty sailor in the U.S. Navy, was in the crowd at an Oct. 4 rally of 20,000 in Newport News where Obama urged a last-minute push to register more first-time voters and get them to the polls. She joined a group chanting “O-ba-ma” so loudly it caught his attention. Wading through the crowd after his speech, Obama reached out and shook her hand.

“He was laughing, so glad that we were so excited,” Burgess told the World. “I thanked him for inspiring people like my husband who had given up on making a difference. My husband’s ship was moored right behind where Obama spoke. He and his crewmates could have walked over to listen to Obama’s speech.”

People, she said, are getting beyond skin color, beyond Republican scare tactics. “Ask yourself: Are you better off than you were four years ago?” she said. “Look at what we got from Bush over the last eight years. To keep going with the same policies, that is really asinine. I can truly say that I believe Barack Obama is going to be our next president.”

Jacquie Green’s husband recently retired from the Navy after 20 years, including multiple deployments to Iraq including Operation Desert Storm. They live in a comfortable home in Chesapeake with their three children. He is now a part-time bus driver in Virginia’s Tidewater region and she works as a telephone technical support person for a company that manufactures photocopiers.

Yet he has had to cash out his military savings so they can make ends meet until that runs out. For Jacqueline, the urgency for change is clear.

“The politicians talk about the middle class but they never talk about the working poor,” she commented. “We are making serious choices: Do we eat or make those repairs to the car? McCain hasn’t done anything for the vets. Active duty soldiers are giving more to Obama than to McCain. Why? Because they want to come home, not stay in Iraq 100 years. We are happy living here in the Virginia Tidewater. We’ll be even happier when Obama is inaugurated next January.”

A member of a military families and veterans group said in a phone interview that hundreds of military families in the Tidewater are supporting Obama. “I think we have a very good chance of carrying Virginia for Obama. We’ve registered so many new voters and the demographics of Virginia have changed so much,” said the activist, a war veteran who is not authorized to speak for the organization.

Military families, including many active-duty sailors and soldiers, are playing a crucial role in winning voters for the Obama-Biden ticket, the veteran activist said. “McCain’s record on veterans’ issues is just horrible. He opposed the 21st Century GI Bill of Rights. He opposed adequate rest time for soldiers before they are deployed for a second or third tour of duty. My brother did two tours in Iraq and one in Afghanistan.”

The veteran concluded, “I’m a Republican. I’ve worked for Republican candidates. It took a lot to switch me over. We’ve had a lot of Republicans at our meetings. At a meeting last week, out of 30 people present, eight were Republicans. We believe Barack Obama should be president.”

Union members are also campaigning hard for Obama in the Tidewater area.

Oct. 6 was the deadline for voter registration in Virginia and a team of Unite-Here union volunteers had gathered at the Teamsters Local 822 hall here to count registration cards filled out by new voters that day.

“We’ve registered over 5,000 new voters since Sept. 8,” said Unite-Here organizer Gwen Mills, who came here from Connecticut on Labor Day to spearhead the project. “The enthusiasm and excitement are just tremendous.”

The team of 36 union volunteers will take a week off and then return to the same neighborhoods and work through Election Day educating voters and getting out the vote.

So far, grassroots volunteers, many of them members of AFL-CIO and Change to Win unions, have signed up 310,000 new voters in Virginia. The project is nonpartisan but the Democrats are winning this fight for first-time voters by a wide margin here and across the nation.

Denise Brown-Lipford, a Unite-Here volunteer from Upper Marlboro, Md., said people she has encountered “tell us how tired they are of not having the income to afford the things they used to be able to afford. Virginia has voted Republican in every presidential election since 1964. This time? I’m betting they vote Democrat.”

UPS Freight Improves Transit Times on 1,900 Lanes in Western States

UPS Freight,on October 8, announced the final phase of its 2008 network enhancements, speeding up transit schedules on more than 1,900 traffic lanes in eight western states.

The improvements mark the third round of network enhancements over the past five months by UPS's heavy freight division. Overall, the company has improved some 12,000 lanes over the past year-and-a-half, offering faster service covering two-thirds of all U.S. ZIP codes.

"UPS is on a path to create a combination of reliability, technology and speed that no other competitor can match," said UPS Freight President Jack Holmes. "Reducing transit times, guaranteeing deliveries and using advanced tracking technology all combine to provide maximum value for our customers."

The latest enhancements cut at least a day from transit times for shipments originating in service centers in Arizona, California, Colorado, Illinois, Kansas, Missouri, Oregon and Washington. Specific enhancements include such lanes as Denver to Miami; Portland, Ore., to Memphis, and Bakersfield, Calif., to Cleveland with all now falling under UPS Freight's three-day delivery schedule.

In August, UPS Freight revised its network to establish two-day lanes from Chicago to Dallas, Boston to St. Louis and Philadelphia to Miami. The enhancements also expanded the next-day footprint of UPS Freight to include Cincinnati to Memphis and Columbus, Ohio, to Charlotte.

Earlier this year, UPS Freight announced new on-time performance guarantees. Those guarantees will be extended to the enhanced transit times announced today at no additional cost.

Wednesday, October 08, 2008

YRC claims it's solid despite share dive

North America's largest trucking company YRC Worldwide earlier this week insisted that it has a solid financial position and can pay down its debts after its share price plunged 30 percent on the Nasdaq, Reuters reported.

Chief executive Bill Zollars said in a statement that with over US$9 billion in annual revenue, coupled with the company's comprehensive networks, their financial position is solid enough to weather the current economic environment.

Some analysts have raised questions about the less-than-truckload (LTL) company's ability to meet its debt covenants in a deteriorating economic environment. LTL operators consolidate smaller loads into a single truck.

Like the rest of the US trucking sector, YRC's business has been hit by a combination of a crumbling housing sector together with weak retail and auto sales.

With demand on the wane, many trucking companies have been forced to compete by lowering their prices to get business.

LTL operator Con-way Inc slashed its full-year earnings outlook last week, citing a "battered" economy and a fiercely competitive pricing environment.

But YRC has also had problems of its own. After struggling for several quarters, the LTL giant instituted a restructuring programme at the beginning of this year that cut 1,100 jobs and shut a number of service centres at two poorly performing regional units.