USF Holland trucks 45 jobs out of Mansfield

In a statement released Tuesday, the Holland, Mich.-based trucking company said its facility at 792 Fifth Ave. will be shuttered and operations consolidated elsewhere in Holland’s regional network.

Currently 45 employees work out of the Mansfield terminal, although the Holland officials did not say how many are drivers and how many are support personnel. The statement said the majority of employees will have the opportunity to transfer to the surrounding Holland facilities.

“We made significant investments in our company during the first quarter to enhance our position in the market and improve our future operating performance,” said Bill Zollars, Chairman, President and CEO of YRC Worldwide, which owns USF Holland. “Unfortunately, the economy progressively weakened throughout the quarter, making it more challenging to get ahead of the volume declines.”

Shifting operations out of Mansfield, Holland plans to serve customers from its Buffalo, Cleveland and Youngstown service centers “in order to support ongoing efforts to improve service performance, reduce costs and maintain competitiveness,” the statement said.

No closing date for the Mansfield terminal was released, though the company said it is currently planning action for the first half of June.

The announcement comes on the heels of a March report that USF Holland was closing 11 terminals in Maryland, New York, Pennsylvania, Virginia and Kansas, affecting 350 employees. This week, the transportation service provider named five additional facilities to be shut down, including the Mansfield operation.

Overland Park-based YRC Worldwide rolls with economy’s changes

YRC Worldwide Inc. cut more than 10 percent of its work force in the first three months of the year.

While discussing its first-quarter financial results with analysts last week, officials said YRC Worldwide laid off about 5,700 employees companywide in the period. The job reductions were due to the weak economy affecting business and also because of operations merging as YRC combined its two national carriers, Yellow Transportation and Roadway.

YRC has its headquarters in Overland Park and operates three truck terminals in the area. A company spokesman said a breakdown of the layoffs by area was not yet available.

YRC Worldwide had about 55,000 employees at the end of 2008, according to a recent regulatory filing. The employment level after the most recent reductions also means the company has about 11,000 fewer employees than it did this time last year, said Bill Zollars, YRC’s chairman and chief executive.

Although the size of YRC’s local work force has declined, the area has managed to avoid any facility closings. YRC, the name of the merged national trucking firm, continues to operate two area terminals. USF Holland, a regional carrier operated by the company, also has kept an area terminal.

USF Holland, which operates mainly in the Midwest, has been hit particularly hard by the production cuts and plant closings in the auto industry. Zollars said the company recently announced that Holland would close five more terminals.

One analyst asked whether the decision by General Motors Corp. to close many plants in the spring and summer, along with the potential of GM and Chrysler filing bankruptcy, would affect YRC Worldwide’s results.

“Our corporate exposure to the auto industry is not significant, but there is more exposure in Holland,” Zollars said. As a result, Holland is trying to diversify its customer base, he said.

Zollars said it was unclear whether business had bottomed out for the freight industry, a sector that usually acts as a leading indicator for the overall economy.

With the recent merger, YRC has made strides in customer service and productivity, both of which should continue to improve, he said.

“But the wild card is the economy,” he said. “We’ve sort of seen a couple of head fakes in the past when we thought the economy stabilized, and then it took another step down. There are a lot of new parts here, and it’s too early to make any kind of call on the second quarter.”

USF Holland consolidating Holland terminal operations into Grand Rapids service center

USF Holland Inc. is closing its Holland terminal and consolidating that into its Grand Rapids service center in Wyoming, the Holland-based trucking firm announced Wednesday.

The company's headquarters, 750 E. 40th St., will remain.

The consolidation of the firm's West Michigan operations to 4600 Clyde Park Ave. SW is part of a continued effort to reduce costs, according to a company statement.

Service to West Michigan will not be affected, according to the company.

Celebrating its 80th anniversary this year, USF Holland employs about 500 people in West Michigan.

"Many employees will have the opportunity to move to the Grand Rapids facility," a company spokeswoman said.

Last month, the company closed 11 terminals in Kansas, Maryland, New York, Pennsylvania and Virginia, affecting about 350 employees.

YRC Worldwide is in talks to put up real estate as collateral in place of pension contributions

YRC Worldwide Inc. is negotiating with the Teamsters union and its lending group about putting up real estate as collateral in place of monthly pension contributions.

In a regulatory filing, YRC said it makes $34 million to $45 million in monthly pension payments depending on employment levels at three trucking subsidiaries, YRC Inc., USF Holland Inc. and New Penn Motor Express Inc.

The company said any agreement would not affect the current or future benefits of those participating in the pension plans.

YRC Worldwide said it has asked it lending group to release some of the $1.5 billion in assets put up as collateral last fall following a credit-rating downgrade. The company said further details will be released once an agreement is reached.

The Overland Park-based trucking company has thousands of current workers and retirees who belong to the Central States Pension Fund, run by the Teamsters. YRC Worldwide is the biggest contributor to the multi-employer plan.

Teamsters officials declined to comment on YRC’s disclosure.

However, an internal Teamsters memo to locals nationwide said YRC was seeking payment deferrals to pension funds for several months, according to a report on the Journal of Commerce’s Web site.

In its annual report, the Central States fund reported $17.3 billion in pension assets at the end of 2008, down from $26.8 billion a year earlier. Much of that loss was blamed on the stock-market collapse last year.

The report of YRC Worldwide’s talks with the union comes a week after Bill Zollars, YRC’s chairman and chief executive, told analysts that freight demand remained very weak.

YRC Seeks Millions in Pension Payment Deferrals

Carrier offers real estate as collateral in lieu of contributions

YRC Worldwide is looking to defer millions of dollars worth of payments into Teamster union pension funds to help prop up the company’s cash reserves as it struggles to improve its finances in the ailing economy.

In an April 13 filing with the Securities and Exchange Commission, YRC, along with USF Holland and New Penn Motor Express, said they are seeking an agreement with the Teamsters and YRC’s banks to use real estate as collateral to the multi-employer pension funds in lieu of making contributions.

“Depending on employment levels (which, in turn, are driven by freight levels and seasonal changes in those levels), the company makes multi-employer pension contributions of $34 million to $45 million per month,” according to the SEC filing.

An internal Teamster memo from Teamster Chairman James P. Hoffa to local unions participating in the National Master Freight Agreement said YRC management was seeking “several months” worth of payment deferrals from the pension funds.

YRC’s latest move to stay afloat in the brutal freight environment comes a week after management told Wall Street analysts that tonnage at its national and regional less-than-truckload operations declined 29 percent and 27 percent respectively, year-over-year in the first quarter.

“It’s certainly not a positive sign,” said David G. Ross of Stifel Nicolaus. “The only reason they would have to do this is that they don’t have the cash, and that means things aren’t good. They said they’re not buying any new equipment, they’ve cut wages 10 percent – anything they can get out of paying, they’re doing. They wouldn’t be thinking about deferring pensions if things were improving.”

USF HOLLAND TO CLOSE 11 TERMINALS; TEAMSTERS GET PREFERENTIAL HIRING

About 330 Union Members Affected

USF Holland has announced it is closing 11 terminals, affecting about 330 Teamster freight members, who will get preferential hiring at New Penn or YRC terminals.

The decision was finalized this week. A special change of operations hearing was held on March 25 in Philadelphia concerning the closures. The terminals being closed are in Philadelphia, Harrisburg, Allentown, Dubois, Wilkes-Barre and Bedford, all in Pennsylvania; Baltimore, Maryland; Albany and Syracuse, New York; Richmond, Virginia; and Wichita, Kansas. Also, the Pittsburgh terminal’s operations will be shifted to Youngstown, Ohio.

USF Holland requested an emergency change of operations hearing due to a severe downturn in business resulting in a loss of approximately $2 million a week in revenue.

Some of the local union demands of the company were that the company would implement the WARN Act where they were required to (Philadelphia and Harrisburg), abide by the National Master Freight Agreement (NMFA) and the Area Supplemental Agreement, pay all earned vacation, sick leave and holidays including the health & welfare and pension on the earned leave.

We all suffer when we go through job losses but the union is doing everything in our power to protect the job and livelihood of our member’s jobs and the integrity of the NMFA.

To read the decision, click here.

WIll a Much Smaller YRC Regional Unit Be Profitable?

Implications

YRC is making moves to close 11 terminals in the Northeast that belonged to the former USF Holland unit, now a part of the money-losing YRC Regional trucking operation. The closings include terminals in Harrisburg, Allentown, Bedford, DuBois, Wilkes-Barre and Philadelphia. The move comes after parent YRC Worldwide has lost more than $1.6 billion the last two years.

Analysis

It's begun. The new "downsized" YRC Worldwide is under way.

Once nearly a $10 billion company with nearly a 30 percent market share in the $34 billion LTL market, YRC Worldwide has begun shuttering terminals, laying off workers and sharply curtailing the size of its money-losing YRC Regional unit.

This story details layoffs of 50 workers at the former USF Holland hub in Harrisburg, Pa. Another 72 persons will be laid off in Philadelphia at the former USF Holland terminal in that city.

The former USF Holland hubs are closing "to support ongoing efforts to improve service performance, reduce costs and maintain competitiveness," according to Keith Lovetro, president of YRC Regional Transportation.

Parent YRC Worldwide has lost in excess of $1.6 billion in the past two years. Whether it is profitable in the first quarter of 2009 is highly doubtful, and most major trucking companies are suffering from a sharp downturn in freight demand due to the recession.

One can reasonable expect that YRC's customers will now be served by its New Penn subsidiary, which it bought as part of the $1.1 billion purchase of Roadway Express in 2003. At the time, Roadway and New Penn were both profitable.

The USF Holland unit came with YRC's $1.2 billion purchase of USF Corp. in 2005 in the climax of YRC's buying binge. As a result of those purchases, which are suspect in retrospect, YRC is a highly leveraged company that is being forced to sell off and close assets to avoid being in violation of loan covenants.

The closings also are an opening for the likes of FedEx Freight, UPS Freight, New England Motor Freight and Estes Express to expand their business in the highly competitive Northeast LTL picture. You can also add Con-way Freight to that mix.

It's probably never been a better time to be a shipper of freight in the Northeast. If shippers cannot negotiate at least a 60 percent discount off list rates in this region now, they never will. A large customer such as Home Depot or Lowe's is probably worth a 70 percent-plus discount.

YRC probably doesn't have much choice but to close these underperforming and overlapping assets, given its precarious financial condition. Competitors are asking whether YRC will survive, and moves such as these only add fuel to the fire as the speculation about YRC continues in the market place.

YRC sues former president of one of its carriers

YRC Worldwide Inc. has sued a former president of one of its carriers, seeking damages for allegedly using company secrets after joining a rival trucker.

The federal suit in Kansas City, Kan., was filed late last month against Robert G. Zimmerman of R+L Carriers Inc. According to the suit, Zimmerman was president from June 2005 to April 2007 of USF Holland Inc., YRC’s biggest regional carrier.

As YRC has cut costs, consolidated operations and reduced staff, several reports have surfaced of rival carriers contacting YRC customers in hopes of getting them to switch their business. This is the first known lawsuit YRC has filed locally against a high-ranking former executive alleging confidential information has been disclosed to a rival company.

The following account is based on Overland Park-based YRC’s lawsuit:

Zimmerman signed a separation agreement with YRC and Holland that provided separation pay and benefits in excess of $75,000. In consideration for the payment, the pact also stated that Zimmerman agreed he would “not, directly or indirectly, use for any purpose, or disclose to any person or entity, any confidential information.”

Late last year, Zimmerman was hired at R+L Carriers, based in Wilmington, Ohio, in a position “nearly identical” to the one he held at USF Holland, according to the suit. Around that same time, several YRC employees left and joined Zimmerman at R+L. They included former vice president of sales Ken Sustarsic and ex-director of sales Tom Doan.

In late December, Doan allegedly e-mailed a spreadsheet to R+L’s sales staff with confidential information on nearly 3,000 YRC customers, encouraging the staff to solicit their business.

In January, YRC sued Doan and Sustarsic in an Ohio court and won a temporary restraining order that they cease using the confidential information and cease contacting YRC customers.

Although he was notified of the lawsuit and court order, “Zimmerman has failed to take any measures to protect against the direct or indirect use or disclosure of YRCW’s confidential information.”

YRC contends Zimmerman has breached the separation agreement and is seeking damages in excess of $75,000.

Zimmerman could not be reached last week at R+L’s headquarters. A YRC spokeswoman said the company did not comment on ongoing litigation.

USF Holland Shuts Down 11 Terminal

YRCW subsidiary copes with weak freight demand throughout system

YRC Worldwide regional less-than-truckload subsidiary USF Holland will close 11 terminals, representing 15 percent of Holland's network, by April 6 to cope with weak freight demand throughout its system.

USF Holland, based in Holland, Mich., has been pummeled by the decline in the automotive industry over the last several years and by increasing competition from large and small regional carriers pushing into its market. In early 2008, the company was forced to retreat from previous expansion into the southeast in the face of stiff competition and declining revenue.

USF Holland terminals that will shut down are in Richmond, Va.; Wichita, Kan.; Albany and Syracuse, N.Y.; Allentown, Bedford, DuBois, Harrisburg, Wilkes-Barre, and Philadelphia, Pa., and Baltimore.

Regional LTL New Penn and YRC, the newly branded long-haul network, will begin making delivers on behalf of Holland beginning April 6. Holland will continue making pickups at the 11 affected locations through April 2, YRC said.

YRC expects to get $25 million to $30 million in annual savings at the regional division, while incurring $8 million to $10 million of one-time shutdown costs, according to documents filed with the SEC.

The Holland closings come a day after competitor FedEx Freight posted a loss of $59 million on revenue of $914 million in its fiscal third quarter.
“We believe USF Holland's terminal closures and FedEx Freights (third quarter) results highlight a very challenging LTL marketplace,” said Wachovia’s Justin Yagerman. “Unfortunately for the industry, we view these terminal closings as a rationalization of under-utilized capacity and not an opportunity for freight to be redistributed to the industry.”

Estes to Make Major Investment in Transportation Industry Real Estate

Estes announced today that it has entered into real estate contracts with YRC Worldwide subsidiaries YRC Inc., USF Reddaway, Inc., and USF Holland Inc., to buy and simultaneously lease back facilities located throughout the U.S. The total investment could be as much as $122 million. This move gives Estes the ability to grow its investment network of real estate properties.

Estes and YRC have a long-standing history of cooperation in the less-than-truckload (LTL) arena. The YRC logistics business unit uses Estes as a transportation service provider for its clients in the ordinary course of business. "We have also worked with YRC over the years on many real estate transactions that have included the buying, selling and leasing of properties, which is common practice in the LTL industry," said Estes' Director of Real Estate and Economic Development, Angela Maidment. "This is a continuation of that mutually beneficial relationship, and now is a great time for us to make this kind of long-term investment."

Teamsters moving to Mokena

After what officers of the union called a 20-year search for a new home, Teamsters Local 710 will move its offices from Chicago to a Mokena industrial park.

The new building, expected to be finished by October, will house about 60 employees of the local as well as its health, welfare and pension funds.

Chartered in 1903, the local now has its offices at 4217 S. Halsted St. and originally represented drivers working in Chicago's stockyards.

"The freight industry grew as the meat industry shrank," Pat Flynn, 710's secretary-treasurer, said at a groundbreaking Thursday for the new 30,000-square-foot building.

The nation's fourth-largest Teamsters local with 14,000 members, 710 represents drivers who work for companies such as ABF, Holland, Roadway, UPS and Yellow.

The local long had studied a move to the suburbs, said Jim Dawes, the local's president.

"This is a task that has literally taken 20 years," he said.

A ZIP code search of where its members live helped identify the southwest suburbs as the "perfect location" for an office that would be more accessible to 710's members, said Flynn, a Tinley Park resident.

"Our entire membership is out in this area today," he said. "This truly is the center of our universe here."

Apart from the union employees who'll work at the office, it will be frequently visited by members looking for information regarding insurance and pension issues, Flynn said. Local business, such as restaurants, could see increased business as a result, he said.

"Our members make decent money, and we spend it pretty well, too," Flynn said.
Having the local move its offices to the village will "bring a greater level of credibility and awareness" to Mokena, Mayor Joe Werner said. Another major union, the Pipefitters, also has offices and a training center in Mokena.

The union's office will be at 9000 W. 187th St. in Corporate Corridors, a business park being developed by Tinley Park-based TCB Development. It's the third such light industrial project undertaken in Mokena by TCB, which has built about 10 million square feet of commercial space in the Chicago area, primarily in the Southland.

Plano mayor will not repeat

For the past seven years, Mayor Bill Roberts has found a way to balance his 14-hour work schedule as a truck driver with his duties as mayor.

But that has changed, and Roberts said this week that he will not, in fact, seek a third term for Plano's top office.

Roberts said his work schedule has changed at his company, USF Holland.

The mayor was assigned two weeks ago to begin work at 5 a.m. and end in the early evening. Instead of his regular 1:30 a.m. start, which allowed him to tend to city business, his new work schedule erases nearly any time for meetings, he said.

"I (now) have to scramble a little bit here with my sick, personal and vacation days to make my term work out. Every term for the last 7-1/2 years, there's been a chance of this happening," Roberts said.

Roberts had announced in late October that he planned to run for re-election.

But this week, he noted that USF Holland is trying to adjust to the new economic climate by implementing "a different philosophy," which came in the form of shift changes.

Economic growth

During his time as mayor, Roberts has previously said he is proud of the annexation and zoning of commercial property that has allowed retailers to come to town.
Also during his tenure, Waubonsee Community College announced a Plano campus, opening in 2010, and several properties downtown and along Route 34 have been acquired by the city.

"We laid a great foundation. With the challenging economy, we've done the right things. We've been frugal and careful," Roberts said.

Election in April

As far as the April election, at least one candidate, 4th Ward Alderman Bob Hausler, has publicly announced a run for mayor.

Roberts said he plans to express his support for a potential mayoral candidate, but would not disclose who just yet.

"There have been a lot of people who are disappointed (in the news) but it's beyond my control," said Roberts, who will serve a total of eight years as mayor when his term ends.

"I've gotten some very nice supportive phone calls," he added.