Local Union Leaders Give TNFINC Authority to Negotiate YRCW Plan

On June 18, representatives from Teamsters freight locals met in Chicago to discuss the operating and financial condition of YRCW.

Based on both internal and independent analyses provided by financial consultants, representatives from each Teamsters freight local union unanimously agreed to give authority for the Teamsters National Freight Industry Negotiating Committee (TNFNIC) to negotiate with stakeholders to address YRCW's need for additional operating cash.

Any proposed modifications, when agreed upon, will require a vote of approval by YRCW Teamster members.

The Teamsters believe these actions, if undertaken along with similar commitments from other stakeholders, will provide the company with significantly enhanced liquidity to operate through the current recession.

TNFNIC will keep Teamster Local Unions and members informed of all developments regarding negotiations and updates will be posted on www.teamster.org.

YRC completes payment plan with largest pension fund

YRC Worldwide Inc. said Thursday that it has a long-anticipated agreement to use real estate as collateral for deferred payments to pension funds.

The Overland Park-based company said it will defer $83 million in payments to the Central States, Southeast and Southwest Areas Pension Fund. The Central States fund is a multi-employer pension fund that represents 58 percent of YRC’s monthly pension obligations.

The agreement allows YRC to put up company real estate as collateral for pension obligations. The company said it is to repay deferred pension contributions during a three-year period beginning in January 2010, with interest accruing monthly beginning July 15. YRC stopped making payments in April as negotiations continued.

YRC also said Thursday that it is working to pull other multi-employer pension funds into the arrangement. The company said it has deferred about $50 million in obligations to these funds.

YRC has said it wants pension reform, with the federal government’s help, because through the multiemployer plans it supports many retirees who never worked for the company, but whose employers went out of business. The plans already have been taking losses as the markets fell. The Central States fund ended 2008 with net assets of $17.3 billion, down more than a third from $26.8 billion at the end of 2007.

As part of the plan to defer pension payments, YRC said it has a deal with creditors that will let it grant second priority liens on property. An amendment to the company’s credit agreement releases $73 million in escrow funds from previous sales of real estates to pay down the company’s revolving credit facility without reducing its ability to draw on that facility.

The company said it has closed on $94 million in real estate sale and sale-leaseback agreements in the second quarter, through June 16. It has another $77 million in transactions under contract. Property sales have been part of the company’s strategy to maintain liquidity as volumes remain weak and it posts losses, including $257.4 million in the first quarter.

“These transactions are especially critical as we continue to face substantial headwinds from the global economic recession,” YRC Chairman and CEO Bill Zollars said in the release. “Today’s announcement marks important milestones, which are part of our overall strategy to provide us with greater financial flexibility during the economic recession, giving us additional liquidity and the ability to use our cash to support the business.”

At the end of May, YRC had cash and cash equivalents — excluding $61 million in restricted cash — of $155 million, compared to $151 million at the end of April.

YRC said Tuesday that it has accelerated its closing of facilities as part of an integration of its Yellow and Roadway networks. It now expects to be down to 400 facilities by the end of June, rather than by the end of the year, creating an estimated $250 million in annual savings.

YRC accelerates closing of facilities as part of integrating Yellow, Roadway

YRC Worldwide Inc. plans to close more facilities this month as it speeds up cost-cutting measures.

The Overland Park-based trucking giant said Tuesday that it expects to pare its Yellow and Roadway networks, integrated earlier this year to become YRC, to about 400 facilities by the end of the month, rather than by the end of the year as previously planned.

“We have been able to accelerate those plans,” the company said in a statement to the Kansas City Business Journal.

The move “will result in a meaningful reduction in fixed and variable costs,” the statement said.

YRC had 521 facilities, 37,000 employees and 16,700 trucks at the end of 2008. By the end of 2009, it had expected to have 400 facilities, 34,000 employees and 14,000 trucks. Those plans already marked a reduction from a target announced in March for 430 facilities by year end.

The move will let YRC more quickly realize the expected $250 million in annual savings, Longbow Research analyst Lee Klaskow said in a Tuesday note.

YRC also said it will close “a small number of facilities” for which it had arranged sale-leaseback deals, but it didn’t elaborate.

“We will provide information on which facilities when the network decisions are finalized,” the statement said.

Klaskow said he heard from industry contacts that YRC was trying to back out of some sale-leaseback agreements with Estes Express Lines Inc. because YRC didn’t have sufficient density in the markets. YRC would have to pay six months in lease payments as penalty.

“Despite this development, we believe Estes and YRC Worldwide will continue to enter into sale leasebacks with one another in 2009 as (YRC) looks to raise cash and Estes looks to improve its network,” Klaskow wrote.

YRC has been selling property, laying off workers and trading wage cuts for company ownership in an effort to combat losses and weak freight volumes. It lost $257.4 million in the first quarter.

Klaskow said YRC faces difficult circumstances — “the freight environment continues to deteriorate despite management’s best efforts to right-size its network” — but management, lenders and other constituents seem to be working together.

“We continue to believe YRC Worldwide has the ability to avoid bankruptcy should the economy begin to show signs of real growth in early 2010 or if more private (less-than-truckload) carriers exit the market,” Klaskow said.

He predicted that YRC could have a chance at roughly $1.1 billion in revenues, or 3 percent market share, from private regional competitors that are struggling.

“If (YRC) were able to win some of this share, we believe it could vastly improve its operation ratio and prove our estimates too pessimistic, given the operational leverage of its network,” Klaskow wrote.

Local driver wins state trucker title

Dave Miller is planning a road trip to Pittsburgh, Pa., later this summer.

The professional tractor-trailer driver, who was featured in a Beacon News story last week, won first place over the weekend in the Illinois Professional Truck Driving Championship, hosted at Joliet Junior College.

The event, sponsored by the Illinois Trucking Association, involved 132 drivers from 13 companies who have accumulated 35 million miles of accident-free driving.

Miller, a St. Charles resident, said he practiced extra hard this year, and was confident going into the competition.

"A few of us got together on the weekends and built our own (competitive) course to practice. The more you practice, the better you compete," he said.

The course for the Illinois Professional Truck Driving Championship consisted of six driving problems demanding skill and persistence.

On one of the courses, drivers were required to parallel park a 53-foot trailer within 57 feet of space and be within 18 inches of the curb, Miller said he came within 5 inches of the curb.

Miller is a driver for Yellow Roadway Corp. in Montgomery and has accumulated 1.5 million accident-free miles in his 25 years as a professional driver.

Miller has previous state wins and has finished in second place in national competition in the past, so he has some idea what to expect for the American Trucking Association's National Truck Driving Championships Aug. 18-22.

"Now we're off to the Super Bowl of trucking," he said.

Arkansas Truck Operators Put Skills to Test

Vehicular obstacles challenged about 100 truck drivers as part of the driving portion of the Arkansas Trucking Championship, a three-day contest that ended Saturday.

The organized competition for drivers held annually in Northwest Arkansas challenged technicians to fix engine problems and drivers to demonstrate their proficiency in avoiding obstacles.

Truckers began lining up for the driving competition around 8 a.m.

John Mullins of Benton, an ABF Freight Systems driver, placed as Arkansas Grand Championship driver for 2009. Loren Hatfield, who also works for Fort Smith-based ABF, finished second overall. Full Story........

Hitting on All Cylinders

Practice pays off for Niles driver in Indiana truck rodeo

It was a good weekend for Dan Ferenczi, as he put it, to be “hitting on all cylinders.”

“It was just my day,” the Niles resident said after winning the Indiana Motor Truck Association’s annual truck-driving competition in Indianapolis.

“You get in a zone. I might go down there tomorrow and finish 10th.”

The new Indiana truck-driving champion said he had participated in the competition four times before and had finished no higher than fourth in his class.

The championship far exceeded his expectations, he added.

“I was hoping for a Top 3 finish,” he said, referring to the tanker class.

A truck driver for YRC (Yellow Roadway Corp.) in South Bend the last 16 years, the 42-year-old Ferenczi said he was eligible for the competition by virtue of his employment with an Indiana trucking firm.

He finished first among the 16 drivers in the tanker-truck division, he said, and was named the champion after accumulating the highest point total among the 121 contestants.

He credited his cousin, Jimmy Anglin, of Niles, and Don Conklin, a LaPorte resident, with helping him practice at a YRC training facility before the June 5 and 6 event. Anglin and Conklin also work for YRC, he said.

“Jimmy, Don and I practiced the last eight Sundays, I’d say for 35 to 60 hours,” he said.

The competition involved a written test and a “pre-trip,” or vehicle inspection, that can feature such simulated defects as rocks or nails concealed in tire treads and pins removed from fire extinguishers in truck cabs.

Ferenczi said he found nine of the 12 defects on his vehicle, overlooking a rubber piece that had been removed from a windshield wiper blade.

Also involved was a truck rodeo consisting of an obstacle course that, among other things, required drivers to back trailers into a precise location.

Ferenczi was flawless in his execution of the drill and later came within 10 inches of a tennis ball that served as the obstacle in an exercise known as “right steer roadkill.”

“That’s pretty good when you lose sight of it early,’’ he said, referring to the tennis ball.

Ferenczi said he had the high score on the course, picking up 265 of a possible 300 points.

A truck driver for 21 years, Ferenczi was accompanied at the competition by his wife, Sheryl.

Although she’s not allowed to ride along when he picks up or drops off freight on his local YRC runs, she’s a huge supporter, as is his family in general, he said.

“My whole family is in it (truck driving). My older brother (Steve) and dad (John) taught me to drive,” said Ferenczi, who has racked up well over 1 million miles on his routes and has never had a traffic ticket or over-the-road accident.

The road won’t get any easier as he’ll be in Pittsburgh from Aug. 18 through 22 for the national truck-driving competition.

More than 400 drivers are expected, including Conklin, who took first place in Indianapolis in the 5-axle class.

The fact the YRC team fell just short of winning the team trophy will give Ferenczi and his fellow drivers a target to shoot for in next year’s state competition.

YRC MEETINGS SCHEDULED FOR 6/17, 6/18

The Teamsters National Freight Industry Committee (TNFINC) has scheduled two meetings to discuss on-going issues at YRC.

On Wednesday, June 17, TNFINC will hold a meeting of pension funds with participant employees of YRC, Inc., USF Holland and New Penn. TNFINC has requested that the Chairman of the Union Trustees, the Fund Administration and the Union Trustees’ attorney and/or professional advisor attend this meeting.

On Thursday, June 18, TNFINC has called a 2-Man meeting to provide each Local Union with a detailed update on the financial challenges facing YRC Worldwide, Inc. companies covered by the NMFA.