YRC chairman: Nonunion workers probably won’t take further cuts

YRC Worldwide Inc.’s nonunion employees probably won’t take further cuts if International Brotherhood of Teamsters workers approve another round of concessions, company Chairman and CEO Bill Zollars said.

The nonunion workers, who constitute about 14,000 of YRC’s 49,000 total employees — or about 29 percent of the work force — early this year took a 10 percent wage cut that now has been extended, along with the suspension of 401(k) matches and benefits cuts.

The Overland Park-based trucking company (Nasdaq: YRCW) has laid off thousands, closed facilities, sold property, amended bank agreements and taken other steps to avoid bankruptcy amid a drawn-out freight recession.

Nonunion workers have taken more of a cut to health and benefits, Zollars said in a Thursday interview.

On Friday, the Teamsters mailed YRC union workers ballots about accepting concessions that include an extra 5 percent wage cut until 2013 and deferral of 18 months of pension contributions. The union workers would get options for an additional 20 percent stake in outstanding YRC stock, along with considerations such as an appointee on the YRC board.

The concessions, which would bring the total union wage cut this year to 15 percent and the total options available to union workers to 35 percent, would save YRC an estimated $825 million through the end of 2010.

In documents distributed to union members last week, the Teamsters said nonunion employees would “have further adjustments made to their total compensation package to bring their total wage and benefit package in line with what reductions are proposed” in the concessions.

“Increases to wages, if any, can only be made in proportion to increases Teamsters will receive each April under the revised agreement,” the Teamsters said.

The company also tried to balance opportunities for union and nonunion employees. Although union employees would get stock options, non-union employees potentially could get raises, Zollars said.

“Union employees will benefit through stock appreciation,” he said. “(Nonunion workers) will benefit from incentive-based compensation as we recover.”

YRC wage cut will remain through 2009

A 10-percent wage cut for YRC Worldwide Inc.’s nonunion workforce will remain in effect through the remainder of the year.

The Overland Park-based trucking giant initially planned to reduce the salary cut to 5 percent in July. But economic conditions forced the company to keep the 10 percent reduction in place, said YRC chairman and chief executive Bill Zollars.
YRC Worldwide has about 1,200 area nonunion workers.

Also, the company reportedly will seek $1 billion in federal aid to help with the company’s obligations to the pension funds for union employees.

The company is starting to realize benefits from the merger of its two national carriers in March, Zollars said this week, but the economy has yet to respond. That has forced YRC Worldwide to maintain the current level of pay cuts as well as keep the company’s suspension of the 401(k) plan match.

“We just can’t predict what’s going to happen with the economy,” he said.
YRC’s drivers and dockworkers voted to accept a 10 percent wage cut for all of 2009. That agreement also eliminates cost-of-living increases and reduces future annual pay raises by 10 percent through the life of the contract, which expires in 2013.

While the wage structure with the union employees remains resolved, the pension is another matter. The Teamsters multi-employer pension plans have become underfunded as fewer carriers participate in the plans. United Parcel Service made a one-time payout to exit the plans last year, leaving YRC Worldwide as the biggest contributor. Full Story.......

YRC Worldwide to cut 600 jobs

YRC Worldwide Inc. is eliminating about 600 non-union jobs by the end of April related to the integration of two subsidiaries and the harsh economy.

The Overland Park, Kan. based trucking company said the cuts result from efficiencies gained from combining Yellow Transportation and Roadway into YRC on March 1 and from ongoing cuts prompted by the economy. Eliminated positions include corporate staff and support positions throughout the company in locations throughout the country.

YRC offered eligible workers an early retirement option, which includes subsidized medical coverage until age 65. Affected employees will get severance benefits, the statement said.

Integrating Yellow and Roadway has been expected to bring about 1,000 job cuts in the second and third quarters. YRC said Wednesday that it is not currently announcing more layoffs.

According to a March 11 presentation by YRC CEO Bill Zollars, Yellow and Roadway had 521 facilities, 37,000 employees and 16,700 trucks at the end of 2008. Around the March 1 integration, about 2,000 employees and 70 facilities were cut. By the end of the year, the combined unit was expected to have 430 facilities, 34,000 employees and 14,000 trucks.

In the presentation, YRC gave no indication that the long-struggling freight industry was recovering and said its first-quarter results would be disappointing, though it expects to save millions because of internal measures.

On Jan. 29, YRC reported a loss of $974.4 million in 2008 and a 7 percent drop in revenue compared with 2007.

Earlier this year, employees who belong to the International Brotherhood of Teamsters union approved an amended labor agreement that included a 10 percent wage cut through 2013 and suspension of cost-of-living adjustments in exchange for a 15 percent stake in the company. Wages for nonunion employees, including executives, were cut by 10 percent until June 30 and by 5 percent from then until Dec. 31 in exchange for a 7 percent stake in the company. The 401(k) match for nonunion employees was eliminated for the first part of the year and reduced for the second part

Labor Pains Are Not Easily Shared

The Teamsters are not generally known for being easy to push around, so it is of some interest that the union's leaders have struck an agreement to allow the country's largest trucking company to cut the pay of its union members by 10 percent to help the firm survive the economic storm.

As you might expect, the deal does not come without a price: In return, union employees will get warrants that will allow them collectively to buy 15 percent of the stock of YRC Worldwide. The company has also assured the union that similar pay cuts will be given to nonunion employees, including top executives.

The hard-nosed calculation made by Teamster officials is that, with YRC's financial viability at stake, it is wiser and fairer to spread the pain among all active workers rather than force the company to lay off even more workers, or refuse to take a cut and possibly force the company into a bankruptcy reorganization in which workers and retirees would likely take even bigger hits. Full Story.....

YRC Worldwide announces moves to ensure liquidity to survive downturn

As the economic road gets rougher, trucking giant YRC Worldwide on Wednesday announced maneuvers that chief executive officer Bill Zollars said would help it navigate through the difficulties.

The company said it had pulled a $150 million equity-for-debt tender offer for some of its notes after the Teamsters failed to approve a wage rollback by Tuesday’s deadline. YRC said it still expected the rollback to be approved by year’s end.

The Overland Park trucker said it was instead discussing with its lenders an amendment to its credit agreements that would improve its cash flow — an agreement expected to be in place by late January. The company also reported it had an agreement for a sales and leaseback of some facilities that would generate about $150 million in cash.

The nation’s largest trucker, employing more than 58,000, was recently forced to put up $1.5 billion in collateral after a debt-rating downgrade by Standard & Poor’s to CC, 10 grades below investment quality.

Investors reacted to Wednesday’s news by pushing YRC’s share price down nearly 20 percent, or 60 cents, to $2.64 in a shortened trading day. More than 4.3 million shares traded, compared with average trading of about 2.7 million.

“As we discussed the tender offer, it kind of became obvious that a better option for everybody would maybe be an amendment to the bank agreement rather than using cash to buy back bonds at a discount,” Zollars said Wednesday after the announcement.

“Because of the fact that we had been sharing our activities with the bank and our forecasts, we were able to move down the road to an amendment pretty effectively with the banks.”

Zollars said that the next three or four months would remain challenging as the economy continued to weaken. But through a number of efforts, he said, the company is building a “cushion” of cash to get it through until the second quarter, when the economy should begin to turn.

YRC reported it had more than $250 million in cash on hand but warned that if the Teamsters did not agree to reductions in its contract and it was unable to make other cash-generating changes, “the risk exists that the company would not have sufficient liquidity in 2009 to meet its operating needs.”

Zollars said such language was needed in a forward-looking statement to protect against the unexpected.

In early December, local union leaders reviewed and approved a proposal that called for about 40,000 YRC Worldwide drivers and dockworkers to take a 10 percent cut to help the struggling company. In exchange for concessions in pay, YRC would establish a trust that could give union members an equity stake in the company.

Officials had said they expected ballots to be counted by Dec. 30.

Under an “equal sacrifice” provision agreed to by YRC, non-union and management employees are also taking cuts in compensation.

Zollars said the wage rollback by the Teamsters would provide the company about $250 million in annual savings and the company would get an additional $100 million in savings from wage and benefit cuts to non-union employees.

He said YRC’s integration of its two biggest units, Yellow Transportation and Roadway, is expected to yield $200 million in annual savings.

He said the company also expected to do another sale and leaseback of facilities, such as the one announced Wednesday, that would generate about $200 million.

YRC reported it had a contract with NATMI Truck Terminals LLC to sell some of its facilities throughout the country for $150.4 million and to simultaneously lease them back for about $21.1 million annually. YRC said it could cancel the deal by Jan. 16 if it couldn’t get releases of existing mortgages by then. But it would have to pay NATMI a $750,000 breakup fee if it does.

Arkansas Best Freight's biggest competitor on brink of bankruptcy

Arkansas Best Freight's biggest competitor is on the verge of collapse, but a deal with the Teamsters union could save 40 thousand jobs. ABF is based in Fort Smith. The Yellow Roadway Corporation is a freight company based in Overland Park, Kansas. facing economic hardship, the company has reached an agreement with union leaders for a 10 percent pay cut across the board. but that doesn't mean the employees won't benefit.

"Through this plan we have created a trust so the members get a 15 percent stake in the company," Teamsters spokesman Brett Caldwell told 5NEWS.

Union employees won't be the only ones tightening their belts. non-union employees will also be asked to make an equal sacrifice. There will be ten percent less in their paychecks. a spokesman for the international brotherhood of teamsters says a similar offer has not been extended to arkansas best freight at this time and the carrier doesn't seem to want one.

This statement was released Friday: "ABF has reviewed the details of the agreement between YRC Worldwide and the international brotherhood of teamsters. We do not believe that agreement is appropriate for our company. We are in the midst of evaluating its impact on our employees, our cost structure and our competitiveness."

Some have speculated that YRC will significantly undercut abf's rates to survive. but Tteamster spokesman Brett Caldwell says that's not the case.

"We want YRC jobs to be protected we want ABF jobs to be protected. In no way would we do this program in order to undercut another union employer."

Caldwell insists that YRC's survival is in Arkansas Best's...best interest.

"If yrc has problems the financial pressure is on ABF as a surviving company for those pension funds would be tremendous."

YRC worldwide teamsters will still have to vote on the contract changes which will likely be approved and take effect January first 2009.

ABF's statement went on to say that they will always act in the best interest of the company and work to ensure the preservation of employee jobs.