Wednesday, June 24, 2009

Teamsters To Hold Talks Thursday About YRC

Union leaders representing staff at YRC Worldwide Inc. will meet Thursday ahead of formal talks on concessions with the U.S. trucking group slated to start June 29.

YRC Worldwide is the largest independent less-than-truckload carrier in the U.S., and has been forced to secure concessions from lenders amid sagging industry volume and multiple restructuring efforts.

International Brotherhood of Teamsters spokesman Galen Munroe told Dow Jones Newswires that union representatives will discuss YRC on an internal call Thursday, but declined to elaborate on the agenda.

Kansas City-based YRC has repeatedly said it doesn't face a bankruptcy filing, but analysts suggested it needed to secure more union concessions to address a short-term funding crunch.

The Teamsters agreed to $200 million in wage cuts in January, and further pay and pension concessions are expected to be on next week's agenda.

"I believe the call is probably going to be used to prep the rank and file as to what to expect heading into negotiations and letting them know how important prompt action is at this time so they can keep YRC a viable entity," said Dahlman Rose analyst Jason Seidl.

He said the Teamsters will have to agree to defer pension payments and will likely be aligned with other stakeholders in seeking to keep the company afloat.

"If they don't, I believe YRC will be out of cash within months, unless the economic environment changes," Seidl said.

He added that the union will likely request language in the contract that allows it to gain back things it gives up, "but that will probably be linked to financial performance."

The union said in a release Tuesday that it plans to begin negotiations next week to address YRC's short-term operating cash needs.

The Teamsters said the negotiations will take place at its headquarters in Washington D.C. and that it's also reaching out to other stakeholders, including pension funds and banks.

YRC said it hasn't announced it is engaged in discussions regarding changes to the national master freight agreement with the Teamsters.

"We do, however, maintain a continuous dialogue with our Teamsters partners to determine the best course and related action plans to successfully manage the business," the company said in an email to DJN.

YRC shares closed up 17% to $1.84 after earlier rising as high as $1.93.

Shares have been battered - losing nearly 90% of their value over the past 12 months - amid concerns about the company's debt load and ability to continue functioning.

Several analysts said shares could have gained Wednesday from short covering or other broad economic news, such as better-than-expected durable goods data.

Last week, shares were pummeled after the company reported plans to defer pension payments to its Central States, Southeast and Southwest Areas Pension Fund. It has been working to alter its pension obligations to conserve cash, which many analysts called an effort to avoid bankruptcy.

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