Teamster, YRC Talks to Resume

YRC Worldwide and the Teamsters union will extend negotiations on contract concessions that could save the carrier $500 million into a second week.

Union and company officials met in Washington June 29 to discuss proposals, including a plan that would defer YRC Worldwide pension payments for 14 months.

The talks will recess for the July 4 holiday and resume July 6.

YRC, an $8.9 billion trucking and logistics company, is struggling to bolster its short-term operating capital. The company reportedly had about $242 million in cash and unused credit at the end of May, up from $221 million at the end of April.

In January the Teamsters accepted a 10 percent wage cut that gave YRC a $320 million boost. In exchange, YRC’s union employees received a 15 percent stake in the company.

The current talks follow a June 18 agreement with the Teamsters Central States, Southeast and Southwest Areas Pension Fund that saves YRC $83 million. The company will use its real estate as collateral in lieu of making second-quarter payments.

The negotiations are YRC’s latest attempt to shore up its operations and finances as it struggles to fend off competition and hold onto customers in a devastating recession. The transport giant hasn’t had a profitable year since 2006, when it was a $9.9 billion company. It lost $638.4 million on $9.6 billion in revenue in 2007 and $974 million on $8.9 billion in revenue in 2008. In the first quarter of 2009, YRC Worldwide reported a $257.4 million net loss on $1.5 billion in revenue.

To stem losses, the company has reduced wages and benefits and cut payroll, renegotiated lending covenants, sold property, integrated its national less-than-truckload operations and offered a variety of incentives to customers.

YRC Worldwide is one of the trucking industry’s largest union employers, with about 40,000 Teamster workers at its national less-than-truckload subsidiary, YRC, and its regional LTL companies USF Holland, USF Reddaway and New Penn Motor Express.

This is the largest freight company in America, and we’ve got to make sure that it does survive,” Teamsters General President James P. Hoffa said before the negotiations.

Contact William B. Cassidy at wcassidy@joc.com.