YRC Worldwide Inc (YRCW)

[califax]

Teamsters Ratify Concessions Aimed At Keeping YRC Worldwide Viable

Date : 10/30/2010 @ 2:34PM
Source : Dow Jones News
Stock : YRC Worldwide Inc. (YRCW)

http://ih.advfn.com/p.php?pid=nmona&article=45002915

Members of the Teamsters union have approved a new round of deep employee concessions at YRC Worldwide Inc. (YRCW), in a vote both union and YRC leadership viewed as crucial to the struggling trucking company's survival.

"We firmly believe this plan is the only hope for saving our members' jobs as this recession continues to cause so much hardship," said Tyson Johnson, director of the Teamsters National Freight Division, in a prepared statement after the vote count was released Saturday.

The International Brotherhood of Teamsters said the agreement "is aimed at saving more than 25,000 union jobs." It noted that about 67% of YRC Worldwide union members cast ballots overall.

The concessions were ratified 62% to 38% by union members at the company's YRC and Holland division, and 69% to 31% at its New Penn unit.

A YRC representative wasn't immediately available for comment Saturday.

Among other things, the new concessions extend a previously agreed-upon 15% wage reduction for an additional two years, until March 31, 2015. The date upon which YRC must resume pension contributions also is delayed until June 1, 2011, with the new contribution to be 25% of the contribution rate in effect on July 1, 2009.

But the agreement also requires the company to reduce its debt and raise new equity, with a deadline of Dec. 31 for a definitive agreement with an equity player or YRC will have to convert some debt to equity. In addition, the plan provides union members with equity, with the precise amount to be determined during negotiations with the new equity investor and lenders.

The Teamsters also can void the concessions in the event of a YRC bankruptcy.

YRC, which teetered under a heavy debt load last year and teetered on the edge of bankruptcy in December, has won extensive concessions over the past two years, both from the union and from its lenders, and it has cut thousands of employees.

The company announced last week that it expects to show improved third-quarter results when it reports the figures Friday. It said it expects a third-quarter operating loss of $18 million to $22 million, compared with $118 million a year ago and $35 million in the second quarter, excluding a stock-compensation gain.

Meanwhile, YRC said its national and regional operations saw per-day tonnage rise 1.2% and 2.1%, respectively, from the second quarter. It said revenue per shipment increased 1.9% and 3.7%, respectively, from a year ago.

-By Bob Sechler, Dow Jones Newswires; 512-258-1690; [e-mail]