The Ship is Listing, Customers are Fleeing but, Wait, You Have to See This Nifty Logo

Implications: YRC Worldwide, as part of its merging of long-haul LTL units Roadway and Express and Yellow Transportation, is rolling out a new logo that simply reads "YRC." It contains the familiar swamp holly orange color of Yellow and the royal blue that Roadway used. The former Yellow Corp. bought Roadway in 2003 for $1.1 billion to create YRC Worldwide, and is part of the reason YRC is now struggling under the weight of more than $2 billion in long-term debt.

Analysis: Maybe they should have just used a $$$ sign for a logo. It might be a constant reminder of why everybody is running all these trucks in the first place.

Financially ailing YRC Worldwide, in a stunning use of priorities, is rolling out a new logo "YRC" to help identify the former Yellow and Roadway companies on their trucks.

Now, maybe I should admit my prejudices right here. I am not a big fan of logos. Except for maybe the interlocking N and Y on the cap of the New York Yankees baseball team, all logos more or less look the same to me.

Of course, then again, I don't do marketing for a living. Greg Reid does. He is the "chief marketing officer" of YRC and he effuses in this story about the "heritage" brands of Yellow and Roadway.

All well and good. But this is a company that is dangerously close to bankruptcy, its workers are giving back 10 percent of their salaries to stay on the job, the company has lost more than 85 percent of stock value in a year and has posted losses in four of the last five operating quarters.

And they're worried about logos?

More from Reid: "A brand is not an identity. A brand is a promise, a promise in the market place. Visual identity is just one part of what makes up a successful brand."

So is making money, earning a successful return on investment for shareholders and serving one's customers.

Maybe I'm being too harsh here. But the job of combining the long-haul Teamster-covered networks of Roadway and Yellow is tough enough, and should require all of management's attention full time. A logo can be designed later, after the company is out of the financial woods.

And make no mistake: YRC is still in deep financial trouble.

Analyst Ed Wolfe of Wolfe Research has combed YRC's most recent 8-K filing with the SEC and finds YRC has many conditions placed on it not just for performance covenants but also to waive in case of a default or a late payment.

This temporary waiver expires on Feb. 17, and includes the reduction of YRC credit from $600 million to $500 million. The waivers also restrict YRC from executing asset sales of above $30 million, except for its previously announced $150 million pending sale/leaseback of some large terminals. The waivers also terminate if YRC incurs more than $30 million of additional indebtedness, makes any acquisitions, fails to deposit cash proceeds from any asset sale into an account maintained by the administrative agent under the credit agreement, according to Wolfe.

Wolfe wrote in a note to investors that he rates YRC has having a "high risk of some form of bankruptcy" within the next three months or so.

Let's hope the design team that did the nifty new logo is part of the secured creditors of YRC.