YRC Worldwide Inc. has been exploring sales of subsidiaries that include New Penn Motor Express Inc. but has received little interest, its union said.
That leaves New Penn union workers with little choice if they want to keep the subsidiary operating past September, the International Brotherhood of Teamsters members said in a letter to New Penn members. Falling trucking valuations and the potential of having to cover unpaid pension payments have kept most potential buyers away, the union said in the letter, dated Aug. 18.
The union sent a second set of ballots to New Penn Teamsters on Aug. 19. The group was among a minority that last month voted down concessions to Overland Park-based YRC (Nasdaq: YRCW), and the union has said YRC is looking into merging regional carrier New Penn into its national unit, which could eliminate hundreds of jobs. That prompted the revote, due Sept. 9.
“Unfortunately, we have been formally notified by YRCW’s vice president of labor relations, and have also accumulated evidence from the field, that YRCW is prepared to shut down New Penn entirely and rebrand all remaining equipment and terminals as YRC exclusively going forward,” the letter said. “As difficult and distasteful as a revote is to conduct, it is our firm belief that New Penn Motor Express will not exist as a motor carrier past September if the (concessions are) rejected again.”
New Penn workers have railed against an extra 5 percent pay cut and giving up 18 months of pension payments, in part because their unit has been profitable for years. But they’re lumped in with a group of regional carriers — including Holland and Reddaway — whose revenues through June have dropped 33 percent from the same period last year and which posted an operating loss of more than $120 million in the first half of 2009, the union said.
New Penn represents about 4 percent of all employees and revenue for YRC, so it doesn’t add enough profitability to prompt YRC to exempt its workers from the companywide cuts, the union said.
If YRC were to file for bankruptcy or change hands, the concessions would end.
The trucking company has been deferring and eliminating pension payments, laying off thousands of workers, selling property, renegotiating lender agreements, integrating subsidiaries, seeking union concessions and taking various other steps so that it can keep enough cash to continue operating.