Tuesday, April 14, 2009

YRC Worldwide is in talks to put up real estate as collateral in place of pension contributions

YRC Worldwide Inc. is negotiating with the Teamsters union and its lending group about putting up real estate as collateral in place of monthly pension contributions.

In a regulatory filing, YRC said it makes $34 million to $45 million in monthly pension payments depending on employment levels at three trucking subsidiaries, YRC Inc., USF Holland Inc. and New Penn Motor Express Inc.

The company said any agreement would not affect the current or future benefits of those participating in the pension plans.

YRC Worldwide said it has asked it lending group to release some of the $1.5 billion in assets put up as collateral last fall following a credit-rating downgrade. The company said further details will be released once an agreement is reached.

The Overland Park-based trucking company has thousands of current workers and retirees who belong to the Central States Pension Fund, run by the Teamsters. YRC Worldwide is the biggest contributor to the multi-employer plan.

Teamsters officials declined to comment on YRC’s disclosure.

However, an internal Teamsters memo to locals nationwide said YRC was seeking payment deferrals to pension funds for several months, according to a report on the Journal of Commerce’s Web site.

In its annual report, the Central States fund reported $17.3 billion in pension assets at the end of 2008, down from $26.8 billion a year earlier. Much of that loss was blamed on the stock-market collapse last year.

The report of YRC Worldwide’s talks with the union comes a week after Bill Zollars, YRC’s chairman and chief executive, told analysts that freight demand remained very weak.

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