Click here to listen to the audio file from the teleconference on Oct 5, 2010
Stabilizing YRCW (the full text can be viewed here)
The International Union has retained a corporate turnaround expert who explained to local officials meeting last week that these provisions will likely stabilize YRC and allow it to return to profitability.
The agreement is conditioned on YRCW converting a significant amount of its debt to equity: that is, banks would accept YRCW stock in exchange for reducing the company’s debt, by December 31, 2010. And the company will be required to find new financing by March 31, 2011.
Summary of Terms
The new concessions would include:
The 15% wage concession would continue for 4.5 years, with annual increases of 40c-45c-40c-40c, minus the 15%. Health and welfare continue as at present, with annual increases of 35c to keep it funded.
Ballots out October 7
Ballots are slated to go out on October 7 to all working and laid off YRCW Teamsters. New Penn Teamsters will be counted separately. The ballots will be counted on October 28 or 29. Independent member observers will be allowed, per a previous lawsuit by Teamsters for a Democratic Union members.
Members to decide
We urge all members to learn the facts, talk with your fellow Teamsters, and give us your feedback and ideas. And cast a vote.
A top YRC Worldwide Inc. executive said the additional concessions sought this month from its union workers would be necessary to continue operating.In a letter to YRC’s Teamsters employees, Mike Smid said a rejection of the tentative agreement reached between company and union leadership could lead to the Overland Park-based trucking giant’s shutdown.
Smid is YRC Worldwide’s chief operating officer and president of YRC Inc., the company’s U.S. carrier. He is among the senior executives under YRC chairman and CEO Bill Zollars, who said he would retire from the company soon.
Ballots will be mailed this week to more than 25,000 YRC drivers and dock workers who are being asked to extend concessions that they have accepted since January 2009. Those cuts have included a 15 percent wage cut as well as YRC’s suspension of monthly payments into Teamsters pension plans since July 2009.
The YRC work force is being asked to extend its national contract to March 2015. It now is set to expire in March 2013. The new agreement calls for the wage cut to remain in effect. However, workers would receive hourly raises of 40 or 45 cents an hour beginning each April from 2011 to 2014.
The new agreement also would allow YRC to continue suspending monthly payments into union pension plans until June. The current concessionary pact has the company’s payment suspension ending in January.
Under the latest proposal, YRC would resume monthly pension contributions at 25 percent of what the company paid previously. That reduced amount could range from $6 million to $10 million.
In his letter, Smid said that adopting the agreement would attract new investors who would work to convert more debt to equity, a condition required by the Teamsters.
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Tuesday, August 18, 2009 | Modified: Friday, October 30, 2009
Here’s a timeline of YRC Worldwide Inc. developments going back to 2003:2009:
Oct. 15: A small segment of YRC union workers again reject the concessions proposal, despite YRC threatening to reroute freight to other locations, according to Teamsters for a Democratic Union.
Oct. 12: YRC lenders suspend until Oct. 30 a key provision requiring that YRC always have $100 million in liquidity.
Oct. 7: In a memo, Wicks tells employees that YRC is capping its severance plan and requiring nonunion workers to take unpaid leave to cut costs.
Oct. 5: YRC promotes CFO Tim Wicks to the new chief operating officer position and makes other senior leadership changes.
Sept. 22: YRC lenders give the company additional leeway because of the effects of integrating the Yellow and Roadway subsidiaries.
Sept. 9: New Penn union workers approve the concessions in a second vote.
Aug. 28: YRC and its lenders finalize a 10th credit agreement amendment.
Aug. 20: YRC names a turnaround consultant, a stipulation of the union concessions. Richard Williamson, managing director of corporate turnaround firm Alvarez & Marsal, was given the title of chief strategy officer. He and his firm had been working with YRC since early in the year.
Aug. 17: Teamsters who work for YRC subsidiary New Penn Motor Express Inc., one of the small bargaining units that voted against the concessions, plan a new vote, reportedly under threat from YRC that the subsidiary otherwise would be shut down.
Aug. 7: Teamsters workers agree to forfeit pension payments for 18 months and take an extra 5 percent wage cut to save YRC an estimated $45 million to $50 million a month through 2010.
June 18: YRC reaches an agreement with its largest union pension fund to defer $83 million in payments, using real estate as collateral.
June 2: YRC overhauls its executive team.
May 29: YRC sells property, including a sale-leaseback of its headquarters, trying to maintain sufficient cash. The company continues work to rejigger credit agreements from February, close facilities and lay off workers.
March 1: YRC completes the integration of Yellow and Roadway.
Jan. 29: For all of 2008, YRC has revenue of $8.94 billion and a loss of $974.4 million, or $16.92 a share. The results include a $141 million impairment charge for the Roadway trade name related to the integration and a $59 million charge at YRC Logistics. During the year, YRC averages 55,000 employees.
Jan. 8: Teamsters workers agree to a 10 percent wage cut and suspension of cost-of-living adjustments, saving an estimated $220 million to $250 million a year, in exchange for options for a 15 percent stake in YRC. Nonunion workers also take compensation cuts, saving $75 million to $85 million in 2009, and get options to buy as much as 7 percent of YRC. Senior executives get pay cuts and can’t participate in the option program.
Nov. 11: For the first three quarters, YRC takes an impairment charge of $823.1 million to write off its National Transportation segment, most of its YRC Logistics segment and some of the value of the trade names of Roadway, Reimer Express Lines and USF.
Oct. 29: YRC will lay off about 3,750 drivers and dockworkers as it merges Yellow and Roadway.
October 17: Near-record numbers of trucking companies go out of business; an analyst voices rising concern about bankruptcy for YRC.
Sept. 8: YRC speeds up the integration of its Yellow and Roadway subsidiaries to save about $200 million a year.
July 1: YRC freezes benefit accruals for non-union employees.
Feb. 11: The Teamsters ratify a new five-year labor contract with YRC.
Feb. 1: YRC Chairman and CEO Bill Zollars says that now “it’s a matter of just making sure we manage our way effectively through this downturn.” The company says it will lower overhead costs by $50 million, of which $30 million in cuts already were made, and improve regional performance by $50 million. Analysts have mixed responses.
Jan. 28: Weak market conditions bring a $781.9 million impairment charge in 2007 for YRC’s National Transportation and Regional Transportation divisions, former USF Corp. companies. YRC has revenue of $9.6 billion and a loss of $638.4 million, or $11.17 a share. During the year, it averages 63,000 employees.
Nov. 2: The trucking industry enters a freight recession that was expected to be moderate.
Oct. 26: YRC says it will cut costs in the next six months by $100 million, including through job cuts, because of the downturn.
Feb. 1: YRC has 2006 revenue of $9.9 billion and earnings of $276.6 million, or $4.74 a share. During the year, it averages 66,000 employees.
Feb. 13: Yellow Roadway Corp. has 2005 revenue of $8.7 billion and earnings of $288.1 million, or $5.07 a share. During the year, it averages 68,000 employees.
Jan. 3: Yellow Roadway Corp. changes its name to YRC Worldwide.
May 24: Yellow Roadway Corp. completes its $1.5 billion purchase of USF Corp.
Jan. 27: Yellow Roadway Corp. has 2004 revenue of $6.8 billion and earnings of $184.3 million, or $3.75 a share. During the year, it averages 50,000 employees.
Jan. 30: Yellow Roadway Corp. has 2003 revenue of $3.07 billion and earnings of $40.7 million, or $1.34 a share. During the year, it averages 50,000 employees.
Dec. 11: Yellow Corp. and Roadway Corp. close on a $1.05 billion merger, forming Yellow Roadway Corp.