Lenders ease YRC Worldwide’s liquidity requirement

YRC Worldwide Inc. and its lenders have finalized another credit agreement amendment, signaling continued support of the trucking giant through financial losses.

Overland Park-based YRC wrapped up the agreement with JPMorgan Chase Bank N.A. and other lenders on Friday, according to a Monday filing with the Securities and Exchange Commission. The agreement maintains a $950 million credit facility for YRC and a senior loan of about $111.5 million, but it suspends until Oct. 13 a requirement that YRC always have liquidity of $100 million or more. It also puts off until Oct. 12 the prepayment of outstanding revolving loans from the proceeds of real estate asset sales; half of any prepayment will increase the revolver reserve amount.

On Aug. 31, the revolver reserve amount was about $100 million; it was not increased by the first $50 million of net cash YRC got from selling real estate since July 30.

The amendment also allows YRC to sell certain property for as much as $400 million in net cash proceeds.

Lenders had to rework credit agreements as a condition of the International Brotherhood of Teamsters’ acceptance of an extra 5 percent pay cut and forfeiting 18 months of pension payments. Most union workers agreed to the concessions early this month.

YRC reported a $309 million loss in the second quarter, coming on the heels of a $257.4 million first-quarter loss.

The company has taken steps that include selling property, integrating subsidiaries, closing facilities, laying off workers and repeatedly amending agreements with lenders in an attempt to maintain liquidity and ride out the recession.

Change to Win Statement on GOP Obstruction of Solis Confirmation

Change to Win executive director Chris Chafe issued the following statement on Rep. Hilda Solis' nomination as U.S. Secretary of Labor.

"A strong Department of Labor is vital to helping American families stay afloat during this severe economic crisis. As our nation hemorrhages millions of jobs -- this morning's announcement indicates that over one million workers have lost their jobs just since Thanksgiving -- America's workers are continuing to be denied a leader that can help restore the economy, rebuild the middle class and renew the American Dream because of the partisan politics of a few.

"The Republican obstruction of the nomination of Hilda Solis as Labor Secretary is a slap in the face to America's hardworking men and women and to the economic recovery our nation so desperately needs. Americans voted for change in historic numbers in November, and today's economic news speaks to the bold actions needed from our nation's leaders. Yet, instead of working together to provide relief, Senate Republicans are offering more of the same divisive politics of the past.

"The seven unions and six million members of Change to Win renew our call urging the Senate to swiftly vote for the confirmation of Hilda Solis as the U.S. Secretary of Labor and help put working people back on the path of prosperity."

W.Va. labor unions pick up members in 2008, report says

Labor union membership in West Virginia increased last year, according to an annual federal survey.

About 101,000 employed workers in West Virginia -- 13.8 percent of the total -- were members of a labor union in 2008, according to the federal Bureau of Labor Statistics. In comparison, about 97,000 or 13.3 percent of employed workers in the state were members of a labor union the year before, the bureau said.

Kenny Perdue, president of the West Virginia AFL-CIO, said, "I think there was a gain in just about every union. I know the service industry has increased, such as in health care. There was an increase with the Teamsters in their organizing of Overnight Trucking. As I look at those numbers I think of the American Federation of Teachers, which brought the West Virginia school service personnel in. That may not show up yet. Those are jobs in the public sector.

"There has been a continuous effort to organize in West Virginia," Perdue said. "It has not stopped and it will not stop. It is our belief that workers want respect in the workplace. Typically it only comes from being involved in a union. We do think workers want to better themselves and have a decent wage and pension and health care. It is going to be our effort to give them that chance."

The percentage of employed workers in West Virginia who carry a union card has fluctuated in recent years, from a low of 13.1 percent in 2003 to a high of 14.4 percent in 2005.

Perdue said declines can be traced to the loss of large unionized manufacturers, such as steel mills in the Northern Panhandle and chemical plants in the Kanawha Valley. Those businesses offer good-paying jobs with health care benefits and pensions, but many of those jobs "are gone maybe forever," he said. "That's not only a loss for our membership but for the per capita income in West Virginia. It hurts across the board." Full Story..........

43,000 jobs are eliminated in latest wave of U.S. layoffs

It was a bleak start to the workweek for thousands of American workers.

Several corporations said Monday morning that they would cut a total of 43,000 jobs in an attempt to slash costs to survive a recession that has taken a toll on new orders, profits and companies' outlooks for growth.

The cuts announced Monday included 20,000 jobs at the heavy-equipment manufacturer Caterpillar; 8,000 at the wireless provider Sprint Nextel, and 7,000 at Home Depot and 8,000 from the expected merger of the pharmaceutical makers Pfizer and Wyeth. Some smaller layoffs were also announced.

President Obama cited the layoff announcements in remarks Monday morning urging Congress to approve an $825 billion economic stimulus package of tax cuts, emergency benefits and public spending projects.

"These are not just numbers on a page," Obama said. "As with the millions of jobs lost in 2008, these are working men and women whose families have been disrupted and whose dreams have been put on hold. We owe it to each of them and to every single American to act with a sense of urgency and common purpose. We can't afford distractions and we cannot afford delays."

Monday's announcements were only the latest in a grim parade of job cuts from employers from Wall Street to wireless providers to computer companies to retail stores.

The United States economy has shed some 2.59 million jobs since the recession began in December 2007, and unemployment rose to 7.2 percent last month. Economists worry that the economy could now be shedding as many as 600,000 jobs a month, and they said Monday's layoff announcements served to underline the stricken state of the labor market. Last week, the government reported that first-time unemployment claims had risen to 589,000 for the week ending Jan. 17, tying an all-time high set in December.

"This is a big deal," said Dean Baker, a director of the Center for Economic and Policy Research. "We're losing jobs at an incredibly rapid rate, and even with that, I'm worried they're accelerating. We're seeing a much more rapid rate of layoff announcements."

Caterpillar, which has been hurt by falling orders for construction and mining machinery, said Monday morning that it would cull 20,000 workers through layoffs and buyouts. It said it would make "sharp declines" in overtime and eliminate scores of temporary and contract jobs.

The company said 2009 would be one of its weakest years since World War II.

"These are very uncertain times," the chief executive, James Owens, said in a statement. "While it's painful for our employees and suppliers, it's absolutely necessary given economic circumstances. We expect to have most of the actions needed to lower employment and cost levels in place by the end of the first quarter."

"We were whipsawed in the fourth quarter as key industries were hit by a rapidly deteriorating global economy and plunging commodity prices," Owens said.

The wireless provider Sprint Nextel said its 8,000 job cuts were part of a plan to trim labor costs by $1.2 billion, and said most of the cuts would be completed by March 31. About 850 of the job cuts are expected to come through buyouts, which will cost the company $300 million in severance costs and related expenses.

"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," Sprint's chief executive, Daniel Hesse, said.

Home Depot, the country's largest home-supply chain, said it would cut 7,000 jobs, about 2 percent of its work force, and close its high-end EXPO home design stores.

Hoffa: Senate should reject death sentence for GM

What's ailing the auto industry in the United States is the same as what's ailing the industry in China, Japan, Europe and South America.

Carmakers around the world are struggling through the worst slump in 40 years. Sales of cars by Toyota and Honda fell more during the last year than did sales of cars by Ford.

For America's Big Three automakers, the bad news turned catastrophic last month. In November, 236,000 North American-made cars were sold. That is a shocking 40 percent drop from the number of cars sold in November 2007. No industry can afford a 40 percent sales decline.

Sure, mistakes were made. But the Big Three's dire straits are a result of frozen credit markets and a global recession.

Fortunately, many in Congress recognize that it's crucial to rescue the U.S. auto industry. The House has approved a bill negotiated with the White House that would use existing money for a short-term loan and restructuring of the troubled carmakers.

There are 1.59 million people employed by the Big Three, their parts suppliers and dealerships. As many as 5 million people depend on the auto industry for work, including Teamsters who haul cars, parts and supplies. Letting the domestic auto industry collapse would dramatically worsen a recession that's already a year old.

It would be disastrous to allow even one of the Big Three to seek bankruptcy protection. That would cause the failure of hundreds of auto parts companies and dealerships. The remaining Big Two automakers, dependent on the parts and dealer networks, would go under. Securitized auto loans and their insurers would fail, whipsawing fragile credit markets.

Another consideration: General Motors couldn't get financing for a Chapter 11 bankruptcy. So do the math. Bankruptcy for one automaker means GM closes its doors. For good.

There are some free-market wing nuts who are fine with that. We've all heard their arguments: "Since the automakers brought their problems on themselves, let them fail." Or, "Don't interfere with the free market."

But they ignore a lesson of the last century: America's peace and prosperity depend on a robust manufacturing base.

We would have lost World War II if we didn't have an auto industry that could produce weapons during the war. That's why Franklin Roosevelt called Detroit the "Arsenal of Democracy."

We would not have enjoyed record prosperity during the post-World War II era without a strong manufacturing base -- and productivity gains that were shared with workers.

In recent decades, we've taken our eye off the ball. Instead of shoring up our manufacturing base, we've favored the interests of Wall Street over other sectors of the economy. Nowhere is that more evident than in the ongoing, multitrillion-dollar bailout of irresponsible financial services companies. (By the way, I don't hear anyone complaining that the unions brought down Lehman Brothers.)

Now, Wall Street's follies are hurting the auto industry.

For those who would pull the plug on our domestic automakers, I ask them to consider that our economic competitors won't let their auto industries vanish.

The European Commission is offering $6.3 billion in industry loans for developing greener cars. The Swedish government said it's prepared to help out its automakers. Japan already subsidizes its auto industry by keeping the yen artificially low.

China's automakers, which are owned or controlled by the government, get research grants and loans from state-owned banks. They're asking the government for emergency help in the form of tax relief, lower gas prices and grants.

I hope Congress will take to heart Franklin Roosevelt's words: "The strength of this nation shall not be diluted by the failure of the government to protect the economic well-being of its citizens."

Obama: Transportation can get economy moving

When President-elect Barack Obama says he wants to get the economy moving again, he means it quite literally.

Transportation will play a central role in Obama's first months in office, not just for policy changes aimed at improving highway, air and rail travel, but as a road toward economic recovery, energy independence and environmental protection.

Solve road congestion, Obama's reasoning goes, and you put people to work.

Use less gasoline and help clean the air.

Build better trains and move goods more efficiently.

Get people out of their cars and reduce greenhouse gas emissions.

"We will create millions of jobs," he said recently, "by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s."

This expansive approach contrasts with the Bush administration's policy that transportation - like other government functions - works best when it is in private hands, or at least in a public-private partnership.

Adopting a libertarian, smaller-government-is-better approach to repairing and modernizing the nation's transportation systems, Bush sought to shift more responsibility to state and local governments and encouraged the use of tolls and private enterprise to pay for it.

Obama is not necessarily against such arrangements. He just thinks the national government should play the leading role in a transportation network on which the country and its economy depends.

"Now is the time to invest in our future and strengthen our core infrastructure," Obama said in an October letter to a coalition of groups interested in transportation and environmental issues. "With unemployment rising, these investments are even more important."

Obama takes office as many critical transportation issues are coming to the fore, creating what some experts see as a once-in-a-generation opportunity to remake national policy.

"What's very hopeful about this president, when it comes to infrastructure, is he's prepared to think big," said Janet Kavinoky, chief transportation lobbyist for the U.S. Chamber of Commerce. She said there is broad political support for major changes in transportation policy.

Obama's transition team is working with congressional Democrats on an economic aid bill that could total as much as $500 billion. The hope is to have it ready for the new president to sign when he takes office Jan. 20.

While details have not been finalized, the bill is expected to include tens of billions of dollars for highway, mass transit, airport, and intercity passenger and freight rail improvements.

Bush's transportation philosophy "seemed to be, `This is what the federal government should be responsible for and nothing else.' And the `nothing else' category was public transportation," said William Millar, executive director of the American Public Transportation Association, whose members include transit agencies.

Obama, on the other hand, has described himself as a strong advocate of mass transit.

While Bush proposed what some lawmakers described as "starvation budgets" for Amtrak, Obama has pledged support for the passenger rail carrier and for developing a national network of high-speed passenger trains.

The Bush administration has feuded bitterly with air traffic controllers since the Federal Aviation Administration imposed a contract in 2006. Obama has promised to appoint an FAA administrator who will work cooperatively with controllers.

Bush tried to ease cross-border trucking between the U.S. and Mexico, angering domestic truckers who fear the competition and say safety would be compromised. Obama promised the International Brotherhood of Teamsters to aggressively inspect cross-border trucks and buses and enforce safety regulations.

Obama's transportation goals face several potential roadblocks.

The federal program that provides aid to states for highway construction and transit expenses expires on Sept. 30, 2009. The current program was funded at $286 billion over five years. Its cost is mainly underwritten by the federal 18.4 cents-per-gallon gas tax, but revenues have failed to keep up with obligations.

Last January, a blue-ribbon transportation commission recommended increasing the gas tax as much as 40 cents a gallon over five years. The additional money would to help cover the federal share of an estimated $225 billion the commission says is needed each year to upgrade transportation systems.

Boosting the gas tax carries political risks. The last time it was raised, a backlash against Democrats in the 1994 elections helped Republicans capture control of the House and Senate. Obama has expressed concern about raising taxes in the current economic climate.

Even without an increase, Obama will have to deal with environmentalists who want to undo a bargain struck during the Reagan administration that funnels roughly 80 percent of gas tax revenue to highway projects and 15 percent to transit. They want to redirect money away from highways to alternatives such as transit and intercity passenger trains.

Obama's energy plan calls for saving as much oil as the U.S. currently imports from the Middle East and Venezuela within 10 years, which is about 3.5 million barrels a day.

"That's going to require a pretty robust program to save oil, which means not just better vehicle technology and not just alternative fuels. ... Something will have to be done about transportation policy," said Deron Lovaas of the Natural Resources Defense Council.

"The question is, does it make sense if energy security is an overarching national commitment to stick to ... a 25-year-old deal?" Lovaas said. "I think the answer is, `No.' That's going to be an enormous fight."

Jobless claims jump to 573,000, a 26-year high

The U.S. labor market weakened further last week, with the number of first-time filings for state unemployment benefits jumping by 58,000 to a 26-year high of 573,000, the Labor Department reported Thursday.

The number of people collecting unemployment benefits rose by 338,000 to stand at 4.43 million, also the highest since late 1982. The increase in continuing claims in the week ended Nov. 29 was the most since 1974.

The jobless claims report shows businesses are laying off workers at a rapid pace, and finding employment is ever harder for those who've lost their jobs. Read the full jobless data report.

Compared with the same week a year ago, new jobless claims are up about 59%, while continuing claims are up 58%.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.

Several technical factors could have boosted initial claims last week, a Labor Department spokesman said. The week after Thanksgiving is traditionally the one with the biggest increase in first-time claims, and the government's seasonal adjustment factors may be overstating the increase this year.

Part of the increase in filings last week could simply be administrative catch-up from Thanksgiving week, when most state unemployment offices were closed for two days.

Worsening trend

Technical factors aside, the report shows a marked deterioration in the labor market. The four-week moving average of new claims -- which tends to smooth out the impact of any special factors -- rose by 14,250 to 540,500, also the highest since late 1982.

The four-week average of continuing claims rose by 131,000 to 4.13 million, the highest since early 1983. "This number suggests that the national unemployment rate will rise to 7.0% or more in December, versus 6.7% in November," wrote analysts for Ried Thunberg ICAP.

The insured unemployment rate -- the proportion of covered workers who are receiving benefits -- increased by two-tenths of a percentage point to 3.3%, the highest in 16 years.

Next week's report on initial claims will cover the same week in which the monthly survey is conducted."The current four-week moving average of initial claims, at 540,000, is consistent with about a 500,000 monthly drop in nonfarm payrolls," wrote Joshua Shapiro, chief economist for MFR Inc.

In November, 533,000 nonfarm payroll jobs were lost, the most for a single month since 1974. The economy has shed 1.9 million jobs since the recession began in December 2007.

"If this pace is sustained, then it would suggest that November's net job loss of 533,000 was not an outlier but perhaps an indicator of more severe deterioration to come," wrote Andrew Gledhill, an economist for Moody's Economy.com. "What is troubling is that labor market conditions have usually not deteriorated by this much by this early in a downturn."

Typically, state unemployment benefits run out after 26 weeks for those who are eligible. A federal law extends unemployment benefits for an extra 13 weeks under the separate federal program.

Benefits are generally available for those who lose their full-time job through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.

In another economic report Thursday, the Labor Department said import prices fell a record 6.7% in November as imported oil prices fell a record 25.8%.

Separately, the Commerce Department said the nation's trade deficit widened to $57.2 billion in October.

Teamsters - YRC negotiations could affect hundreds of local workers

One of the largest shipping companies in the country is at the negotiation table with the Teamsters, and hundreds of Michiana workers could be affected by what comes out of the talks.

About 350 Michiana workers are employed by YRC Worldwide, which you likely know as the three shipping companies they own: Yellow Transportation, USF Holland, and Roadway.

YRC's CEO Bob Zollars says they're exploring their options with the teamsters, to see how they can help the company through this tough economic time.

“We approached the Teamsters in an effort to explore all available options under the National Master Freight Agreement to ensure competitiveness and preserve the benefits and jobs of our union employees,” Zollars said Tuesday, according to the Kansas City Star.

In a memo sent to local Teamster members yesterday, the organization says, "It is questionable if the company can generate enough money to prevent a prolonged downturn," as the struggling economy may affect their ability to borrow money to pay down debts.

The company is trying to re-negotiate the contract they signed 9 months ago, that gave workers a raise.

The teamsters say they're not negotiating the parts of their contract that include benefits; they're really only talking about the possibility of decreasing their pay.

Local teamsters say some sort of agreement is in everyone's best interest.

“We hope we can keep jobs we just want to come to work every day and take a paycheck so we can feed our families just like you and everybody else,” said Dennis Switzer, a Yellow employee who has worked at the terminal in South Bend for 13 years.

“We're in the middle of a recession. We're in the middle of a huge economic downturn and (YRC), like everyone else, is having some struggles. But they’re working through those struggles and they're going to be fine. They’re going to survive and be competitive,” said Bob Warnock III, President of the Local Teamsters #364.

Meanwhile, investment experts don't expect YRC to go out of business over the next few months.

But they do expect its stock to remain volatile, and it's dropped by about 80% over the last year.

These contract negotiations have been going on since Monday.

YRC is the second largest employer of Teamster employees in the country, and there are about 40,000 union employees nationwide at YRC.

YRC could not be reached for comment Wednesday.