An industry analyst is raising strong doubts about whether trucking company YRC Worldwide Inc. will be able to avoid bankruptcy, even with the latest labor contract concessions from its 35,000 Teamsters employees.
''Bankruptcy, in our view, is not imminent, but we do believe it is becoming increasingly likely,'' wrote transportation analyst David Ross of Baltimore-based Stifel Nicolaus. Other industry analysts have also said YRC could file for bankruptcy.
In the report issued Wednesday, Ross downgraded YRC shares from ''hold'' to ''sell,'' saying company stock is basically worthless. It is likely that the first quarter of 2010 — typically the industry's weakest time of the year — will be the company's last, he said.
Company employees now own ''35 percent of zero,'' Ross said in an interview.
Shares of YRC on Wednesday fell 25 cents to $2.05. Shares are down 28.6 percent since Jan. 1 and are down 89.5 percent from a year ago.
YRC executives have been saying that they are cutting costs and making other changes to improve company finances. Chief Executive Officer Bill Zollars called the Teamsters vote on the latest concessions ''game changing.''
The company issued a statement Wednesday in response to the analyst report:
''YRC Worldwide continues to report significant progress on its comprehensive plan to manage through the economic recession. Through the ongoing support of its key stakeholders including its lender group, union and non-union employees and pension funds, the company is moving forward with its strategic plans to restore financial strength and position its operating companies for future success.