Friday, January 16, 2009

YRC receives extension to amend debt terms

YRC Worldwide Inc. said it received an extension from its lending group to amend its debt terms.

One of the country's biggest trucking firms, Overland Park-based YRC said the banking group has allowed it to waive certain debt-compliance issues till mid-February. That will allow the company to report its 2008 results after the market's close on Jan. 29 as scheduled, the company said.

"This is another indication that our banking group supports the strategic actions we are taking and is working with us to provide the flexibility we need during the economic recession," YRC chairman and chief executive Bill Zollars said in a statement.

YRC has taken a series of steps to try and conserve cash as it tries to survive the typically slow winter months in the middle of a historical economic slowdown. The company's union workers have agreed to take a 10 percent wage cut, and its nonunion workforce has also reduced its total compensation.

The company also is in the midst of a sale-leaseback transaction for many of its terminals, including a pending deal expected to generate $150 million.

YRC Worldwide Schedules Fourth Quarter Conference Call

YRC Worldwide Inc. will host a conference call for shareholders and the investment community on Friday, January 30, 2009, beginning at 9:30am ET, 8:30am CT. Fourth quarter and full-year earnings will be released after the market close on Thursday, January 29, 2009.

Hosting the teleconference will be: Bill Zollars, Chairman, President and CEO, YRC Worldwide; Tim Wicks, Executive Vice President and CFO, YRC Worldwide; Mike Smid, President, YRC National Transportation; and Jim Ritchie, CEO, YRC Logistics.

The conference call will be open to listeners through a live webcast via StreetEvents at streetevents.com and via the YRC Worldwide Internet site yrcw.com.

An audio playback will be available via the StreetEvents and YRC Worldwide web sites.

Thursday, January 15, 2009

Hundreds of Union Members to March in 56th Inaugural Parade

On January 20, hundreds of America's working men and women will join representatives from across the country and our armed forces to participate in the official inaugural parade for the nation's 44th president, Barack Obama. The 2009 inauguration marks the first time in recent history that representatives from America's labor unions have been invited to march in the official parade. The 265-person ensemble will include members from Change to Win, the AFL-CIO and the National Education Association.

"The Inaugural Parade is a celebration of America and the people that make this country great," said Change to Win chair Anna Burger. "From the members of the armed forces who have dedicated their lives to protecting our nation, to those who build our roads and bridges, teach our children, take care of the sick and elderly, transport our goods, process our food, and keep our nation running. Working families are excited to seize this moment and revive the American Dream. We are honored to take part in this truly historic tradition."

The delegation of marchers will lead the only pro-worker float down the parade path under the theme of "Honoring America's Workers." The marchers will carry a banner with the slogan "America's Workers: United for Change" along with flags that represent the issues most important to working families: an Economy that Works for All, Great Public Schools, Good Jobs Green Jobs, and Health Care for All.

"America's working men and women are celebrating a historic new beginning today," said AFL-CIO President John Sweeney. "Our nation is built on the hard work of people just like those marching in today's parade -- the nurses, teachers, firefighters, construction workers and others who are our nation's union members. Let's honor them and honor this great nation."

The entire float was fabricated by union carpenters, welders, sculptors and painters. Constructed of steel, wood and foam, it will rise more than seventeen feet in height and span twenty-four feet in length. Outlines of the different "faces of labor" will surround the float to salute the backbone of our country -- the hard working men and women that get up and go to work everyday. A Teamsters member will drive the truck supporting the float through the parade route.

"NEA and its members are proud to join AFL-CIO and Change to Win in this first-ever labor-sponsored inauguration parade float," said NEA President Dennis Van Roekel. "The 'America's Workers United for Change' parade unit, including the participation of 43 public school employees, provides organized labor the opportunity to emphasize the important role of America's workers in helping to renew America's promise."

Truckers continue to cut costs, reduce capacity in down market

As trucking firms continued to report demand declines in the fourth quarter, they were doing whatever it takes to reduce costs, including renegotiating their union wage contracts and reducing overall capacity wherever possible.

Troubled trucking giant YRC, parent of Yellow and Roadway, said a tentative deal with Teamsters union employees for a 10% wage cut will provide $225–$250 million in savings when combined with non-union employee cuts in January. In exchange for the wage cut, Overland Park, Kans.-based YRC will offer its union employees a 15% stake in the company.

But analyst Thomas Albrecht at Stephens Inc. in Little Rock, Ark. warns that history does not provide a positive outlook to truckers making wage cuts. "Precedent for LTL wage rollbacks is not promising. We know six carriers that did this and none survived. But YRC's size at 25% market share and proactiveness in addressing cost and balance sheet issues give it better survival odds than predecessors."

YRC is certainly not alone among truckers looking to reduce costs, given the current level of overcapacity and outlook for LTL demand heading into 2009. Also in December, Menlo Park, Calif.-based logistics firm Con-way reported a steep drop in fourth-quarter demand and reduced its Con-way Freight LTL division's workforce by approximately 8%, or about 1,450 positions. Con-way Freight in Ann Arbor, Mich., said LTL tonnage volumes were down 3.8% in October and 9.2% in November, respectively.

"While we are focused on aggressive cost-reduction measures, over the past two months the effect of decelerating volumes in the LTL market, coupled with pricing pressures and lower fuel surcharges, have significantly curtailed expectations for 2008 earnings, the fourth quarter in particular," said Douglas Stotlar, Con-way president and CEO, in a statement.

Just how much is the trucking market slumping? The American Trucking Associations' seasonally adjusted truck tonnage index, which measures the weight of freight hauled by U.S. truckers based on membership surveys, fell to its lowest level in five years in October. And Stifel Nicolaus analyst John Larkin in St. Louis said he expects the trucking industry to see more capacity reductions and bankruptcies over the next four months. Further evidence: truck engine maker Cummins is cutting jobs and idling plants on the expectation that the market will not come back in 2009.

Certainly, conventional wisdom says when demand is low, rates should come down as well. But as Purchasing reported in its December issue, buyers need to be wary of cutting too close to the bone in trucking contracts. And more recently, Wolfe Research warns that "while truck capacity has moved back in favor of shippers over the past few months, many shippers we speak with remain wary about reducing rates which could materially further reduce capacity, leading to larger rate increases when demand returns. Our sense is that contract rates are likely to remain flat to modestly up, while the spot market has recently inflected down again."

Stifel analyst David Ross says that much in the LTL market, including pricing, depends on the fate of YRC.

"We believe that 4Q08-1Q09 has been/should be so bad that it will likely define the bottom of the freight cycle, as companies can only draw down inventories so far and the credit/lending market should thaw out over time, in our view," Ross says. He adds that if YRC does not make it through the downturn "all other LTL carriers should be immediately made healthy and look to grow profitably and hire again. And if they make it through this downturn, they will have to shed a significant amount of capacity, which should also tighten up the supply/demand environment and improve pricing in the LTL industry."

Wednesday, January 14, 2009

Top Truck Drivers Named to New America's Road Team

The American Trucking Associations today announced the Captains of the 2009 - 2010 America's Road Team. The premier group of million-mile, accident-free professional truck drivers will spend the next two years representing the trucking industry and delivering its highway safety message to the motoring public.

18 captains, with a collective 468 years of experience and over 30.7 million safe-driving miles, were selected from a group of 34 finalists who competed this week before a panel of judges from the trucking industry and related fields. The competition included a review of trucking industry expertise and a demonstration of their communication skills, combined with their community service and lifetime safety records.

"The America's Road Team is the best way the trucking industry can reach out to the motoring public to advance the image of the industry," said ATA President and CEO Bill Graves. "These elite professional drivers combine impressive safety records with the desire to share their dedication and passion for safety. The trucking industry is proud to welcome these new Captains as they serve as ambassadors, sharing trucking's message of professionalism, safety and essentiality."

ATA created America's Road Team in 1986. It continues today with the generous support of Volvo Trucks North America. The Team represents America's 3.5 million professional drivers and serves as an example of the professional dedication and teamwork needed to deliver America's freight safely and on time.

"Volvo Trucks congratulates the outstanding drivers chosen to represent the U.S. trucking industry in 2009 and 2010," said Scott Kress, Volvo Trucks senior vice president - sales & marketing. "Their driving records and complete professionalism demonstrate their commitment to safety and the pride they take in driving a truck well, every day. They make possible the benefit to society that the trucking industry delivers. Volvo also salutes their employers, since America's Road Team wouldn't happen without their support."

While maintaining their jobs as full-time professional drivers, the new America's Road Team Captains will now travel the country speaking on behalf of the trucking industry to the community, news media and public officials. The Captains will address transportation and safety issues, speaking at community events and anywhere they can reach the motoring public to share safe driving tips and offer advice on how to safely share the road with tractor-trailers.

The Road Team Captains also advocate safety to those within the industry at terminals and truck stops. They speak with fellow drivers, driver training students and corporate safety officers. They also have the opportunity to present trucking and safety issues before our public officials, at the national, state and local levels.

To be nominated to serve as a Road Team Captain, the candidates must be employed as a company driver or leased owner-operator by a full-dues-paying member of ATA. Each nominee must have an excellent safety record and demonstrate an ability to communicate a commitment to safety and professionalism.

2009-2010 America's Road Team Captains


NAME COMPANY HOME CITY / STATE

Gerald Charron Con-way Freight Danville, VT
Tim Dean Werner Enterprises Griswold, IA
Rich Ewing Yellow Transportation Bellingham, WA
John Foran United Parcel Service Saint Albans, VT
James Gallagher Roadway Williamsville, NY
Paul Gattin ABF Freight System Benton, AR
Ronald Hawkins, Jr. K-Limited Carrier Ltd. Perrysburg, OH
Mark Hassemer Yellow Transportation Whitelaw, WI
Barry Holland UPS Freight Hurlock, MD
Edward Hosegood Publix Super Markets, Inc. Lakeland, FL
Keith Johnson Roadway Eatonville, WA
Gary Leu Wal-Mart Transportation Shelbina, MO
Greg Nauertz Roadway Peoria, AZ
Kurt Pedersen Con-way Freight Surprise, AZ
Ben Saiz ABF Freight System Estancia, NM
Frank Silio Covenant Transport Miami, FL
Jeffrey Thompson FedEx Freight Olathe, KS
Ron Van Bibber Roadway South Jordan, UT

Tuesday, January 13, 2009

Unions revamp campaign for card-check bill

Several high-profile leaders in the labor and civil rights movement said the bill, which would allow workers to bypass secret-ballot elections if a majority sign petition cards, is vital to ending employers’ harassment and intimidation of workers. In turn, if employees can unionize, they can negotiate for better wages and benefits, argued the advocates.

“Restoring the middle class is key to getting our economy back on track,” said Mary Beth Maxwell, executive director for American Rights at Work.

Business associations, like the U.S. Chamber of Commerce, said that if the bill, also known as card-check, becomes law, strikes and work stoppages will become much more frequent, dragging down industry. The Chamber has put together a more than $10 million campaign against the bill since the election.

Labor has argued that while production and business revenue has gradually increased over the past three decades, workers’ pay has remained stagnant and they have not shared in the nation’s increasing wealth.

“To bridge this gap in inequality, we have to give people the chance to collectively bargain with their employers,” said former Rep. David Bonior (D-Mich.), chairman of the labor advocacy group. “This act is not only important for union organizers but for those who are not in a union.”

Tuesday’s television ad buy is the group’s second since the election. It also follows on the heels of last week’s announcement by the Service Employees International Union of a new campaign for the legislation, as well as a push for healthcare reform and the economic recovery package. SEIU has already committed $10 million and said it planned to use 30 percent of the union’s resources overall, estimated to be at least $50 million, for the effort.

Labor officials said there was no specific timing on when the bill would reach the House floor this year, though congressional leaders are motivated to move the legislation quickly.

Bill Samuel, director of government affairs for the AFL-CIO, said he thought “this spring” the bill would move for a House vote.

“We expect it to be in a group of bills that will address the economy,” Samuel said.
Several high-profile leaders in the labor and civil rights movement said the bill, which would allow workers to bypass secret-ballot elections if a majority sign petition cards, is vital to ending employers’ harassment and intimidation of workers. In turn, if employees can unionize, they can negotiate for better wages and benefits, argued the advocates.
“Restoring the middle class is key to getting our economy back on track,” said Mary Beth Maxwell, executive director for American Rights at Work.

Business associations, like the U.S. Chamber of Commerce, said that if the bill, also known as card-check, becomes law, strikes and work stoppages will become much more frequent, dragging down industry. The Chamber has put together a more than $10 million campaign against the bill since the election.

Labor has argued that while production and business revenue has gradually increased over the past three decades, workers’ pay has remained stagnant and they have not shared in the nation’s increasing wealth.

“To bridge this gap in inequality, we have to give people the chance to collectively bargain with their employers,” said former Rep. David Bonior (D-Mich.), chairman of the labor advocacy group. “This act is not only important for union organizers but for those who are not in a union.”

Tuesday’s television ad buy is the group’s second since the election. It also follows on the heels of last week’s announcement by the Service Employees International Union of a new campaign for the legislation, as well as a push for healthcare reform and the economic recovery package. SEIU has already committed $10 million and said it planned to use 30 percent of the union’s resources overall, estimated to be at least $50 million, for the effort.

Labor officials said there was no specific timing on when the bill would reach the House floor this year, though congressional leaders are motivated to move the legislation quickly.

Bill Samuel, director of government affairs for the AFL-CIO, said he thought “this spring” the bill would move for a House vote.

“We expect it to be in a group of bills that will address the economy,” Samuel said.

Monday, January 12, 2009

Downgrade sends YRC stock south

YRC Worldwide Inc.’s stock took a dive Monday after Fitch Ratings Inc. downgraded the issuer default and debt ratings of YRC and its YRC Regional Transportation Inc. subsidiary late Friday and raised the specter of bankruptcy if YRC can’t amend its credit agreements.

Around 10:10 a.m. Monday, stock in Overland Park-based YRC Worldwide was trading at $4.25, down 71 cents, or 14 percent, according to Yahoo Finance.

In a research note Friday, Fitch Ratings said it had downgraded YRC Worldwide’s and YRC Regional Transportation’s issuer default ratings to “CCC” from “B” and their senior secured notes ratings to “C/RR6” from “CCC+/RR6.”

Fitch placed all the ratings for YRC and the subsidiary on “Rating Watch Negative.”

The ratings apply to about $550 milion in notes, a $150 million secured term loan and a $950 million secured revolving credit facility.

“The downgrade of YRCW’s ratings reflects heightened concerns about the company’s prospects in light of ongoing severe weakness in the U.S. freight market, as well as the company’s announcement that it is engaged in discussions with its lenders to revise the leverage covenants in its credit facility and asset backed securitization (ABS) facility agreements,” Fitch said in the note.

The ratings company said the concerns remained despite YRC’s International Brotherhood of Teamsters-memberemployees’ vote Thursdayto approve an amended labor agreement that includes a 10 percent wage cut and suspension of cost-of-living adjustments in exchange for a 15 percent state in the company.

YRC’ssudden stop on Dec. 24of a senior-debt buyback offer probably caused it to end 2008 with “a debt level well above Fitch’s earlier expectations,” Fitch said in the note.

If YRC can’t reach agreement with its bank group to revise the agreements before it files its annual report with the Securities and Exchange Commission, Fitch said, “a year-end leverage level above 3.5 (times) would result in a default on the facilities, which likely would force a near-term bankruptcy filing.”

Fitch said its longer-term concerns about YRC include the company’s debt maturities in 2010. YRC ranks No. 2 on the Kansas City Business Journal 's list of area public companies.

Sunday, January 11, 2009

2.6 Million Jobs Cut In 2008

The U.S. economy has lost over 2.6 million jobs in the last year alone, the greatest decline since 1945. As Anthony Mason reports, the unemployment rate could still go higher.



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Tar Heel of the Week: Union organizer now speaks for 6 million workers

Chris Chafe gets a chuckle from the puns.
Yes, his name is Chafe and he's a labor organizer, a workers advocate who can rub management the wrong way.

But mild-mannered, good-humored and politically shrewd are better words for the work style of the executive director of Change To Win, an alliance of seven unions with 6 million members.

"He is nice, low-key," says Anna Burger, the national labor leader who helped form the powerful 3-year-old federation, which includes the Teamsters and Service Employees International Union.

"I actively recruited him because I think he's a great leader," Burger said.

Chafe's attributes -- dedication to his work, flexibility in negotiating -- have taken him a long way in the world of organized labor. He's gone from staging rallies in Southern textile mill towns to helping shape law in the halls of Congress.

For much of his adult life, Chafe, 40, has lived out of suitcases, moving from hotel room to hotel room while trying to persuade textile workers to come together for greater bargaining power.

These days he splits his time between Carrboro, where he lives with his wife and two children, and the nation's capital, where he has a small studio apartment with a fold-down Murphy bed.

"When I'm in Washington, I work till 11 o'clock at night," Chafe says. "It's all about face time. It's pretty exhausting."

But Chafe and others in the labor movement are enthusiastic about the long hours required of them in recent months.

In North Carolina, one of the least unionized states in the country, organized labor scored a major victory late last year. After a bitter 15-year battle, a union was formed at Smithfield Foods, a pork-industry giant.

For the November elections, national labor organizations invested millions of dollars in campaigns for state offices and sent out hundreds of union members to knock on doors, help with phone banks and distribute candidates' literature at plant gates and blue-collar hotbeds.

"For people who aren't from the South, there's sort of an assumption that people here are conservative," Chafe said. "But if you've lived here, you know that's not true, that there's always been a history of progressives going up against mill owners."

Chafe was born in New York City, but he grew up in Chapel Hill when it was known as fertile ground for politically progressive ideas and left-wing politics.

As a self-proclaimed "sports nut" in the heart of ACC basketball country, the young Chafe showed early his propensity to pull for the underdog.

His father, William Chafe, is a noted historian at Duke University. His mother, Lorna Chafe, is a retired social worker who got her graduate degree at UNC-Chapel Hill.

Although the family rooted for both the Blue Devils and the Tar Heels during most of college basketball season, theirs was a house divided when the rivals played each other.

"They're both such great teams, my general rule has always been to cheer whoever is behind," the politically savvy Chafe said.

Steeped in politics

Growing up, Chafe was fascinated with the civil rights heroes his father's research brought to their home. He also walked precincts for the David Price and Jim Hunt campaigns before he was old enough to vote.

"I was blessed I was raised here," Chafe said last week, while sitting in a local food co-op cafe near the Chapel Hill-Carrboro border.

Since his childhood, he has moved away from and returned to the western part of the Triangle several times.

After getting a bachelor's degree in peace studies at Colgate University, Chafe came back from the campus in Hamilton, N.Y., with only the notion that he wanted to get involved in politics. A friend of his father's took him out for a beer at a Darryl's restaurant between Chapel Hill and Durham and asked him to give three days of his life to a labor organizing workshop in Eastern North Carolina.

"From the minute I got there," Chafe said, "I knew I would learn more doing that work than in my four years in college."

A career was born.

In the early days, Chafe worked for little more than food money.

"It was $26 a day, and, frighteningly, I saved money," he says now.

The young organizer spent a lot of time in Eden, branched out to Kannapolis and towns in Western North Carolina, and he eventually went to Mississippi.

The work could be exhilarating and dangerous.

One night in September 1991, returning to his motel after a meeting with Mississippi shirt workers, Chafe found out how risky his business was. Traveling alone down a dark, rural highway, he was halted by a traffic accident caused by two cows in the road.

He pulled over to help and quickly found out the car behind had been following him for a reason. A large man from that car -- he later saw it parked in the plant manager's space -- assailed Chafe.

"I had to literally outrun this guy, and he was humongous -- he probably clocked in at 270 pounds," Chafe recalls.

Advising Edwards

The incident did not dissuade Chafe from his fight for low-wage workers. He eventually became chief of staff for UNITE-HERE, a major textile union, before joining John Edwards' presidential campaign as a senior adviser.

Chafe said he was surprised and dismayed by Edwards' extramarital affair with Rielle Hunter. He has spoken with the former senator many times since then and expressed those feelings.

"But at the end of the day," Chafe adds, "I'm immensely proud of having been a part of a campaign that I think helped drive the agenda of the Democrats to give working families a chance. "

With that in mind, Chafe jumped at the offer six months ago to head Change To Win, even though it means spending more time away from his family than he prefers. He worries that he misses too many spontaneous moments with his daughter Lila, 6 1/2, and son Jordan, almost 5.

"There are some moments I will never get back," Chafe says regretfully. "But I know some day my kids will be proud of what I do."

A typical weeks starts Monday morning on an airplane from Raleigh-Durham to Washington. If his schedule permits, Chafe flies back Wednesday night. Sometimes there are meetings at the end of the week that require more flights.

"I can always count on Chris being helpful to me in making the argument about investing in the South and organizing in the South," said James Andrews, president of the N.C. State A.F.L.-C.I.O.

Others count on him, too, to remember his roots -- both Southern and in the movement.

"Chris is a unique individual, and I worked very hard to promote his ascending to the position he's in," said Chip Roth, a Teamsters lobbyist in North Carolina. "I believe it is essential that the leadership of the labor movement, both nationally and locally, must reflect the tradition of organizing."