Friday, September 23, 2011

The demonstrated danger of cross-border trucking

New evidence suggests that the U.S. Department of Transportation is fully aware of the dangers inherent in opening our border to unsafe Mexican trucks.

The Teamsters union has long warned that opening the border to Mexican trucks endangers America’s highway safety and threatens U.S. warehouse and trucking jobs. We’ve been making that argument during the 17 years since the North American Free Trade Agreement (NAFTA) took effect. The agreement calls for Mexican trucks to freely roam our interstates.

Since December 2006, we have had still another reason to fight to keep our southern border closed: the horrific drug wars that have killed 40,000 people in Mexico. But even as the Department of Transportation tried to assuage our concerns about fatigued Mexican drivers and decrepit Mexican trucks, officials have said little or nothing about the possibility of drug violence spilling over our borders.

Earlier this year, DOT announced it would start another pilot program to allow Mexican trucks to travel beyond the narrow border zone. Last month, Transportation Secretary Ray LaHood said two Mexican carriers would soon get approval to participate in the pilot program. Full Story....

Wednesday, September 21, 2011

ABF President and CEO Wesley B. Kemp to Retire; Roy M. Slagle Named His Successor

Arkansas Best Corporation today announced that Wesley B. Kemp, current President and Chief Executive Officer of its largest subsidiary, ABF Freight System, Inc., will retire on December 31, 2011. Roy M. Slagle, ABF's current Senior Vice President of Sales and Marketing, will become ABF's President and Chief Executive Officer, effective January 1, 2012.

Mr. Kemp, who is 65 years old, has served as the President and Chief Executive Officer of ABF since January 2010. Throughout his nearly 43-year career with ABF, beginning as a management trainee in 1969, Wes continually advanced in ABF leadership positions with increasing responsibility including Regional Vice President of Operations, Vice President of Terminal Operations, Senior Vice President of Operations, President and Chief Operating Officer and his current position of President and CEO.

"During his ABF career that has spanned more than four decades, Wes Kemp has been an integral part of ABF's transformation from a small LTL carrier with revenues totaling $45 million and service centers in 12 states to a flexible, innovative, and full-service LTL carrier with $1.7 billion in revenues and 275 service centers across North America," said Judy R. McReynolds, Arkansas Best President and Chief Executive Officer.

"Wes Kemp is a man of integrity and a true professional. His hard work and dedication to detail have benefited our company during his time here. Wes took over the leadership of ABF in the midst of one of the most severe recessions in our company's history. His patience and guidance during this very difficult time have enabled ABF to return to profitability," said Ms. McReynolds. "We thank Wes for his longtime service to our company and we wish Wes and his wife Sharon Ann much happiness for many years to come as they enjoy more time together."

Roy Slagle, who is 57 years old, has been in his current position since February 2006. During his 35 years with ABF he also served as Vice President Administration and Treasurer, Vice President and Treasurer, and Regional Vice President of Sales. Mr. Slagle's early years with the company included a variety of field operations positions in Ohio and Pennsylvania. He began his ABF career at the Dayton, OH distribution center and was the branch manager of ABF's Carlisle, PA distribution center for three years. These are the two largest facilities in the ABF network.

"As a result of the operational, sales, pricing and administrative experiences that Roy Slagle has had during his ABF career, he possesses a comprehensive skill set that uniquely qualifies him to lead ABF into the future," said Ms. McReynolds. "Roy's experience in almost every area of ABF, both in field operations and in our corporate headquarters, gives him a strong foundation from which to draw as CEO of ABF."

"Roy's experience and success in guiding ABF's sales, marketing and pricing efforts during a challenging period in the LTL industry will be important assets as he leads ABF in adjusting to marketplace changes and in being flexible to meet the evolving needs of our customers," said Ms. McReynolds. "In spite of the fact that an experienced leader like Wes Kemp is retiring from our company, I feel comfortable that ABF will be in great hands under Roy's leadership."

Tuesday, September 20, 2011

YRC Worldwide Announces Results of Special Stockholder Meeting

YRC Worldwide Inc. announced today that a Special Meeting of Stockholders of YRC Worldwide was held on September 16th, 2011. At the meeting, stockholders of YRC Worldwide approved the merger agreement between YRC Worldwide and a recently formed wholly-owned subsidiary, YRC Merger Sub, Inc., whereby YRC Worldwide is the surviving corporation of the merger.

In connection with the merger, the certificate of incorporation of YRC Worldwide was amended and restated to, among other things, increase the number of authorized common shares to 10 billion. This stockholder approval caused the number of outstanding common shares to increase to approximately 1.9 billion as compared to the previous level of approximately 48 million, as the approximately five million Series B convertible preferred shares issued on July 22, 2011 automatically converted to common shares. In addition, convertible notes issued on July 22, 2011 have conversion rights for another approximately 4.1 billion common shares, of which approximately 2.3 billion common shares may be issued upon conversion at any time following the merger and an additional approximately 1.8 billion common shares may be issued upon conversion after July 22, 2013.

"This is an important and required step in our restructuring process," said Jamie Pierson, interim chief financial officer - YRC Worldwide. "This merger allows us to increase our authorized common shares to allow for the conversion of our preferred stock issued during the restructuring in July."

YRC Worldwide has also announced that it has received a notice from NASDAQ stating that the company is subject to delisting since its common stock has traded below a $1.00 share price for more than 30 consecutive trading days.

The company received a prior delisting notice due to the issuance of securities without stockholder approval during the July restructuring. YRC Worldwide is currently in an appeal process with NASDAQ to allow it to remain listed on the exchange.

"Despite the additional delisting notice from NASDAQ, YRC Worldwide remains confident that the company is well positioned for long-term success," said James Welch, chief executive officer - YRC Worldwide.

Last July, YRCW successfully completed a restructuring transaction pursuant to which the company issued new convertible notes for the infusion of $100 million in new capital; increased liquidity by replacing the company's existing asset-backed securitization (ABS) facility with a new three-year, $400 million asset-based loan (ABL) facility; and exchanged a portion of the company's loans and other obligations for new securities, including equity.

"We expected to receive this notice due to dilution of our common stock from the restructuring transaction," added Mr. Welch. "Our listing status will not affect our ability to provide reliable transportation solutions to our customers."

Sunday, September 18, 2011


Today, YRCW held a special meeting of its shareholders to approve the final step in its restructuring. When the restructuring transaction closed on July 22, 2011, it required a merger of corporate entities in the fall to complete the restructuring. In the shareholder vote, 99 percent of all shares voted to approve the merger.

In concert with this approval, all preferred shares issued in connection with the restructuring transaction will convert to common equity. Teamster YRCW members receiving stock allocations to their 401(k) accounts set up in conjunction with the transaction should expect shares to be distributed to their accounts on or before September 30, 2011.

To be clear, today’s developments do not affect the daily operations of YRCW but are a step forward in moving beyond the completed restructuring.

For more information, link to YRC’s 8K filed today with the SEC.

YRC says its directors actually are taking pay cuts

YRC Worldwide Inc. wants to set the record straight about the compensation it’s providing to its board of directors.

A couple weeks ago, I reported about a securities filing from the Overland Park-based trucking company detailing pay for its new board, which took over in the summer after YRC completed its financial restructuring.

The story noted that YRC planned to pay its directors a cash retainer of $75,000 a year, extra payments of between $10,000 and $15,000 for committee chairmen, and restricted stock units worth $100,000.

By comparison, the board a year ago was set to make $50,000 in cash, chairman bonuses of $5,000 to $7,500, and $77,500 in restricted stock, according to Securities and Exchange Commission filings. Full Story.....