YRC Worldwide Inc (YRCW)

[Seminole Red]

YRC Worldwide Inc. has capped its severance plan and is requiring nonunion workers to take unpaid leave to cut costs.

Employees have to take eight hours of unpaid time off each month, starting this month and extending through February, though it could end earlier depending on YRC’s performance, COO Timothy Wicks said in a Wednesday memo to employees. Employees also can volunteer for sabbaticals of two to eight weeks between October and January, during which they would get 15 percent of salary or basic wages and keep health care coverage.

The severance plan has been capped at 12 weeks of pay, based on length of service, and as much as nine months of subsidized health care coverage, the memo said, adding that the “vast majority” of job cuts tied to the integration and reorganization have concluded.

The Overland Park-based company (Nasdaq: YRCW) has made good progress on its recovery plan, but costs have to be managed aggressively, particularly as the company enters the fourth quarter because its business is seasonal, the memo said.

“By implementing these actions now — even as we have reason to be encouraged about the future — we help to improve our financial performance and our ability to protect more jobs today and in the months ahead,” Wicks wrote.

Nonunion employees represent roughly a third of YRC’s less than 49,000 employees; YRC has about 1,000 nonunion employees in the Kansas City area.

Wicks was named as YRC’s chief operating officer, a new position, on Oct. 5. He had been CFO.

YRC has been fighting the specter of bankruptcy amid drawn-out freight recession and customer defections. It has laid off thousands, cut wages, sold property, made 10 credit agreement amendments and gotten two vital concessions from union workers this year. It’s nearing an Oct. 13 deadline to meet a lender requirement that YRC have liquidity of at least $100 million.

Union and nonunion workers took 10 percent paycuts in January. In August, union workers agreed to an additional 5 percent pay cut, plus forfeiting 18 months of pension payments — saving YRC an estimated $825 million through 2010.

Company Chairman and CEO Bill Zollars caused a flap in July, before the second union vote, when he told the Kansas City Business Journal that nonunion workers wouldn’t take further cuts. He later apologized to the union.

YRC, the nation’s largest less-than-truckload carrier, ranks No. 2 on the Kansas City Business Journal’s list of area public companies.