Friday, August 07, 2009

YRC Worldwide expects union vote results Friday

Results of a union vote that will play a key role in YRC Worldwide Inc.’s future are expected Friday afternoon.

In a Thursday memo to freight local unions, Tyson Johnson, freight division director for the International Brotherhood of Teamsters, said an overwhelming number of ballots were cast regarding the concessions, meaning sorting would continue Friday morning, with a result announcement likely in the afternoon.

The concessions, the second proposed this year, include forfeiting 18 months of pension payments — which would not have to be repaid — and taking an extra 5 percent wage cut to save the trucking giant at least $45 million a month. YRC offered considerations such as options for an additional 20 percent stake in the company and a union-appointed board seat.

In a July 30 conference call, YRC executives expressed confidence in a positive outcome. Chairman and CEO Bill Zollars called it a “game-changing event” for YRC.

“All eyes now are on the Teamsters,” Jason Seidl, a Dahlman Rose & Co. LLC analyst, said in a Wednesday interview. “If this doesn’t happen, there is no Plan B. B probably stands for bankruptcy.”

In January, workers approved a 10 percent wage cut and were offered a 15 percent stake in YRC.

If the union concessions pass, then bondholders and lenders will have to do their part, and YRC will have to win back some of the business it lost, Seidl said Wednesday.

Last week, YRC reported a $309 million loss in the second quarter. The company has taken steps that include selling property, integrating subsidiaries, closing facilities, laying off workers and amending agreements with lenders in an attempt to ride out the recession.

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