Trucker YRC's Presumptuous TARP Funds Application

For those who don’t know, YRC Worldwide (YRCW) is the former Yellow Roadway. Here is some of what the Wall Street Journal is reporting:

YRC Worldwide Inc., one of the nation’s largest trucking companies, will seek $1 billion in federal bailout money to help relieve pension obligations, the chief executive said Thursday. Chief Executive William Zollars said the company will seek the money to help cover the cost of its estimated $2 billion pension obligation over the next four years. Under a complicated system that Mr. Zollars labeled 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.

Awfully presumptuous of him, don’t you think, applying as a trucking company without any indication Treasury would ever widen TARP to include any U.S. corporation? I would be shocked if this were approved, and if somehow it is, TARP would be completely out of control.

Mr. Zollars declined to comment on YRC’s specific strategy in seeking the funds, other than to say the company shouldn’t be forced to pay the pension benefits of employees who never worked for YRC.

This seems like an odd explanation. I don’t know the details of the “complicated, multi-union” pension plan in question, but it strikes me as probable that if half of YRC’s contribution goes to people who didn’t work for YRC, then the other truckling companies are in the same boat and are paying for some of YRC’s former employees. Does Zollars want to stop paying for non-YRC pensions while still having his competitors subsidize YRC’s pension obligations? The whole thing is bizarre, to say the least.

Full Disclosure: No position in YRCW at the time of writing, but positions may change at any time

Comments

[poet02476:]

who is going to pay the 4-6 billion they owe right now to the funds like the central states fund? UPS stepped up and paid their share. YRC says they may never be able to pay their share. If Zollarswasn't so power happy they would have left RDW alone and allowed New Penn to flourish. But no, Zollars wanted to control the LTL world. Its over. No way should we allow TARP to bail out YRC. Its like giving the crew of the Titanic a 8 oz. cup to help bail out the water. It is merely only a matter of time now. CF operated at about what YRC is right now. Don't buy green bananas.

May 18 10:34 AM

[poet02476:]

one billion is merely a band-aid. YRC does not have the money to pay what they owe now to the fund which is anywhere from 4-6 billion that owe now. Never mind the next four years. It will be throwing good money after bad. Simple economics will tell you once assets are less than liabilities, the clock is ticking.


On May 17 06:55 AM JtotheV wrote:

> Um, Chad. You should educate yourself a little better on the companies
> you "cover." To anyone who knows anything about YRC's situation you
> sound like an idiot. Half of your "article" is based on your misunderstanding
> of multi-employer pensions, and your big idea here about Zollars
> being presumptuous is just dumb. Zollars is rolling the dice that
> a Democrat-controlled White House and Congress will be sympathetic
> to a company that employs 50,000 union members. Is that presumptuous?
> Does Democrats protecting the unions seem "odd" to you? And are you
> really saying that one billion to a trucking company makes TARP "out
> of control?" As of February, over 300 firms had received 200-billion
> dollars in TARP money, but you'd have us believe that this billion
> is one toke over the line. Thanks for the input, Chad.

May 18 10:35 AM

[phubaiguy:]

If I were a union member and looking at this administration, I would immediately go back to Madame Nhu's after we had? her husband assassinated.."With friends like this..who needs enemies?" Maybe the government will cough up some money..maybe it won't.

May 18 04:47 PM

[Ricky812:]

Yellow Freight System should have NEVER got with Roadway in anyway whatsoever!!!! I do beleive that Zollars head is to big for himself. Roadway has took this great company down like they always said they would do. Its the biggest shame I have ever seen!!!

May 19 04:07 PM

[trucker918:]

I think you mean Yellow has taken down Roadway. If not, you better get the facts straight.


On May 19 04:07 PM Ricky812 wrote:

> Yellow Freight System should have NEVER got with Roadway in anyway
> whatsoever!!!! I do beleive that Zollars head is to big for himself.
> Roadway has took this great company down like they always said they
> would do. Its the biggest shame I have ever seen!!!

May 21 07:56 PM

[truck745:]

I hope yrc gets the funds they are asking for.like they say its not a dumb question if you don't ask.if you ask you might get what you need.id rather see money spent here in the US than overseas to some rogue country that don't give a rats derry air about us.plus the money is badly needed in this economy.takes money to make money.it seems to me the past administration has or was keeping the economy down for some reason.that caused tremendous pressure on these corporations and having an adverse effect on the economy.so I think its the govt responsibility to right the ship but in a cautionary way.my opinion

May 22 03:52 PM

[timothy baudo:]

from my experiance of 11 years with this company i was used to yellow having a state of the art computer system to know exactly where there frt was anywhere any time in there system.on march 1st that all came to an end, every shipment that came into chicago was lost. if you owned a company would'you want to move your frt with the best system availiable.yellows system was so good for tracking frt other companies purchased the user rights ABF CONWAY UPS FRT OLDDOMINION SAIA and othersyellow has recieved many awards on there patented system just look it up in transport topics, oh yea FED EX FRT was the first to buy it.roadway gave the bullshit excuse that it was to expensive to use our system,somwhere around 9mil,the dumbshit that said that should have been fired that moment,we lost 257mil in that qtr. 9mil don't sound like to much now does it.I deal with customers everyday and they tell me they did'nt like roadway 25 yrs ago and they still don't because of the lousy customer service,and even though they loved yellow they WILL NOT use YRC after hearing nothing has changed. in my eyes we went back 30 yrs in technology, it does'nt sound promising for a 21st century carrier, in fact it sounds like they did'nt spend on technology because they don't plan on being here for long .so heres my prediction in this order,terminal closings,apply for some sort of bailout money,take all the freebees our dumbfuck non organizing international union can give them HOFFA and then complain about how the economy ruined everything, last but not least file BK ......POOF 160YRS of combined frt experience evaporates, now you tell me, does it sound deliberate now . i know a little about these things my past employers were ..HALLS MTR FRT/FOREWAY EXPRESS/HOLMES FRT LINES/ PRESTON TRUCKING SOON TO BE YELLOW/ROADWAY i know people dont like hearing this stuff i got bills to but lets see whos right.

May 31 03:12 AM

[Huggybear:]

If it wasn't for the union's everybody would be making $7.00 a hour.
except the big shots. You need to read up your history and see where we were as a country without unions!


On May 17 09:34 AM thedriessen wrote:

> Yellow has to go as the company is mismanaged and their market share
> just happens to be amount of overcapacity in the industry.....oh
> well, if the union would have worked with company with flexible work
> rules only (not talking pay or benefits here) they would not be in
> this bind. However, when the dinasours went extinct they did not
> get a bailout either. Same story with the auto companies.

Jun 03 08:39 PM

[laidoff worker:]

Right now here in Indiana YRC is making very bad deal with the union here local 135 and getting away with it..WE are laidoff and working just to replace call off worker, mean while the bid guys are working 60 hrs aweek. and we are sitting here talking about a pension uumm let me see if i remember right if you don't work you don't pay into the pension so why would your local give in to a dead in deal like that.You have to ask yourself do the union know something we don't.I understand you 30 years are more guys need to work but if the younger guy doesn't work to pay into the pension you might have one anyway.

Jun 07 10:08 AM

[keepingitreal:]

First of all my deepest sympathy to anyone who has lost their job or had hours cut back because of this mess that has been created by YRC. Here is my own personal opinion as well as my professional opinion as a shipper.
THE UNION played a major part in your company going down the road to bankruptcy, and the workers (management included but not the only ones to blame) did the rest.
Unions served a purpose back in the early years, before Workers Rights laws were enacted in this country starting in the early 50’s. Until that time I could see where Unions fought for workers rights and demand a fair and decent work environment for the workers.
Then GREED set in and here we are today. The Unions wanted more money, which meant more workers, and in turn offered outrageous pay and benefits to those workers or they would strike and cause the companies great harm. The GREED of the workers, all too quick to jump on board and take what they did not EARN, played a major factor in the Unions growing and growing and growing.
Now here we are, and everyone wants to blame someone else, past CEO’s or previous contracts, and they want to sweep away the real root of the problem. You see you shouldn’t get a free pass for poorly managing a company. Small business owners risk everything they have each and every day just to make a “decent” living. YRC, on the other hand, pays outlandish salaries to nearly all of its employees, spend money on outlandish items such as a poorly negotiated pension plan, and wants to cry foul??? Unbelievable. Take no blame but instead just ask for “free” money? Or admit fault but dismiss it as though they are just words you must say in order to keep your job? Very sad to see what our Union “friends” have managed to do. You have run the auto industry into the ground with these same sorts of contracts and now they are paying the price. The BIG 3 will never be again, nor will YRC.
If YRC wants to be cutting edge again, file bankruptcy, end your Union association/affiliation, and see how cost competitive you can be without these large labor contracts and pension benefits looming overhead can make you.


Article 23
1. Everyone has the right to work, to free choice of employment, to just and favorable conditions of work and to protection against unemployment.
2. Everyone, without any discrimination, has the right to equal pay for equal work.
3. Everyone who works has the right to just and favorable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
4. Everyone has the right to form and to join trade unions for the protection of his interests

Jun 08 11:11 AM

[keepingitreal:]

And look where those very unions have you now Huggybear. All workers are entitled to good paying jobs with decent benefits. Unions took all of that away and paid outrageous pay and benefit packages with enabled people to live way better than they should have, and NOW you want to cry foul? Blame the rest of the world for your problem?
Here is a little fact for you. If everyone made $7.00 a hour then cars would cost less and you wouldn't have the imports bringing down the almighty BIG 3. Personally speaking I will NEVER buy another car from the BIG 3 again, and I dare some to call me un American because I choose to not line the pockets of the Union. If everyone made $7.00 a hour then houses would be priced accordingly, as would food and all CONSUMER GOODS.
But because of the Union's greed, and that of their workers, you are now getting your asses kicked in this new global economy and you want the NON UNION taxpayers to bail your asses out.
ONLY IN AMERICA!!!! SHAMELESS>


On Jun 03 08:39 PM Huggybear wrote:

> If it wasn't for the union's everybody would be making $7.00 a hour.
>
> except the big shots. You need to read up your history and see where
> we were as a country without unions!

Jun 08 11:20 AM

[Gary 794:]

Why should the Taxpayer bail out YRC'S pension fund. How about the Government giving back the massive amount of money lost in 401K's by many workers. Don't know where you get the idea that the last Administration was keeping the economy down but if you recall, just a few short years ago the trucking industry had its best year in history. The blame game needs to be directed to greed and greed alone. Yellow became YRC by greed and hopefully will fail because of greed.


On May 22 03:52 PM truck745 wrote:

> I hope yrc gets the funds they are asking for.like they say its not
> a dumb question if you don't ask.if you ask you might get what you
> need.id rather see money spent here in the US than overseas to some
> rogue country that don't give a rats derry air about us.plus the
> money is badly needed in this economy.takes money to make money.it
> seems to me the past administration has or was keeping the economy
> down for some reason.that caused tremendous pressure on these corporations
> and having an adverse effect on the economy.so I think its the govt
> responsibility to right the ship but in a cautionary way.my opinion

Jun 11 10:10 AM

[Gary 794:]

To all you Teamster Union Members. Do you really think Jimmy Hoffa gives a rats ass about you. You better wake up and smell the roses. Hoffa's only interest in the Teamsters is to ensure his lavish life style. Chicago style politics running the Teamsters. Do I need the union, NO. I work for a large LTL Carrier and am making more money than the Teamsters. I don't have a teamster pension for Hoffa to live off of but my company is generous in helping my retirement.

Jun 11 10:18 AM

[mustangracer:]

I agree with Poet. In addition,This company is terribly miss managed at all levels. Roadway was paid for with no long term debt. It was Yellow's banker dream , and they leined ever peice of property instantly. We all forgot about how Mike Wickham sold up out. As far as the union goes. for those fools that that think the union isnt flexable, you are as ignorant as Chad. because frankly I am considering not paying my dues. I am a 20 yr veteran, overtime is out of control, we are missing customers becaquse we dont have the man power even though we have a 28% rule in the contract no one will enforce, the union is running scared because they put themselfs in a bad enviroment. CCX was supposed to be organized in 5 years, that was 15 years ago, instead C.F, goes out of bussiness. then starts the propaganda, form the scabs. Then the shift of freight to the scabs. Then more union jobs gone, then companies moving to mexico, less docks tro back into, more companies gone. The share of scabs gone is out there to just know one heres about them.

It is a viciuose cycle with no way out. the toilet is flushed, and Blue collar workers are going down

Jun 21 04:35 PM

[steve18:]

if you morrons haven;t looked at the country our great republcans have shipped all of our freight out of the country and with nobody here with a job whoes going to buy anything to bring the ecnonomy back them think again they could give two hoots to ashit about anybody but themselves

Jun 30 03:45 PM

[User 443540:]

Does Seeking Alpha not require even a rudimentary understanding of a topic/company/industry before letting someone write about it? You embarrass yourself and Seeking Alpha with your incredible ignorance regarding the pension issue.

Hopefully, SA is re-evaluating assignments or at the very least, hiring someone to look over these sort of articles to check for a minimum understanding on the authors' part.

Jul 08 10:03 PM

[sincitytrucker:]

its hard to say if yrc should get tarp funds , but it seems the companies that got us here got plenty. yellow was poorlly run not roadway why did the sec allow the buyout. as a new penn employee who was one of if not the most profitable trucking companies in the country being dragged down by yrc sucks.too big to fail we compromise more employees than gm,but we dont produce product. we gave 10% in pay back to the company and make less than our comp, mr zollars is right we do get strangled by the unfunded pension fund.try making the playing field fair some of our main competition does not even get paid ot at all. is that fair.

Jul 09 10:44 AM

[Bobby West:]

YRC and Zollars simply cannot compete with the non union LTL carriers. There are way too many carriers competing for a dwindling market share and the large union carriers have never offered the flexibility on work rules to compete and are now banking on an upswing in the economy. How ironic that a democratic controlled congress and administration will be the straw that breaks the camel's back and destroys this economy along with any hope of an increasing LTL market share.

Jul 09 06:32 PM

[sincitytrucker:]

to all my teamster brothers, we are near the end of the road and to survive we have to take a step back or two and be gratefull for what we have and realize we will not get what we have anywhere else.i for one am willing to fight for my company dont dog it and get your 10%back i know you.if you have been in this business for a while you know it has never been like this,and if you were an asshole to believe obamaa was going to do anything about it you now know his stimulous is 2 years away, election time. wake up be lucky for what we have and if it takes one year no pension, think thats roughly 100$ a month later on ,thats a steak good dinner once a month.look around lets take what we can get ou competitors are on the edge too.fight brothers fight.

Jul 09 08:16 PM

[debra:]

thats because the pension fund is for teamsters. plenty of other trucking companies have folded, but their retirees still get union retirement $$ that the rest (i think LAST) union carrier has to keep afloat.


On May 17 06:58 AM Freya wrote:

> Since you don't know the "Details" why don't you look them up instead
> of making a presumptious opinion?
>
> Let's say there is an Insurance Pool. That Pool comes into play if
> a disaster occurs so that the "many can cover the losses". If enough
> companies leave the Pool, it no longer serves its purpose and will
> be dissolved or enough new members are added.
>
> If New members are not being added to the above "Pool", then the
> onus is on those remaining. The Pool no longer serves the purpose
> it was created to accomplish.
>
> It should either be dissolved, additional members added or the Agency
> which created it should aid in its funding, That's the US Government.

Jul 14 10:22 AM