YRC Worldwide Inc (YRCW)

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YRC Worldwide CEO Says Co Won't Seek TARP Funds
Date : 06/12/2009 @ 8:51AM
Source : Dow Jones News
Stock : YRC Worldwide Inc. (YRCW)
Quote : 2.55 -0.03 (-1.16%) @ 7:58PM


YRC Worldwide CEO Says Co Won't Seek TARP Funds





By Bob Sechler
Of DOW JONES NEWSWIRES

YRC Worldwide Inc. (YRCW) has backed off plans to seek $1 billion in federal bailout money under the Troubled Asset Relief Program, or TARP, although the struggling trucker says it still wants government help with pension obligations.

Chief Executive Bill Zollars told The Wall Street Journal last month that YRC would apply for bailout funds to help cover an estimated $2 billion pension obligation over the next four years. At the time, Zollars said he hoped the move would lead to a dialogue with federal authorities regarding ways to reduce YRC's massive pension obligation.

Zollars reversed course on the TARP funds in a video update that YRC emailed to customers Thursday.

"We're not asking for a bailout," Zollars said in the video. "We don't want any money from the federal government."

But he reiterated his goal of seeking a government solution to what YRC considers "structural inequities" regarding its pension obligations.

"Fixing the pension fund with the help of the federal government is really what we're after," he said.

Under a complicated system that Zollars contends is unfair, roughly half of YRC's contributions to a multi-employer union pension fund cover the costs of retirees who never worked for the Overland Park, Kan., company. Under the system, YRC says it contributes to 36 multi-employer pension plans, many of which stem from companies that no longer exist.

"What we would like to do is be more competitive in the marketplace and get rid of some of the costs that really don't relate to how well we're doing" on an operating basis, Zollars said.

YRC, created through the 2003 combination of the Yellow and Roadway trucking brands, has been wrestling with a substantial debt burden, in addition to its pension obligations.

Among other moves, the company has cut wages and laid off thousands of employees.

-By Bob Sechler, Dow Jones Newswires; 512-394-0285; [e-mail]