YRC Worldwide: Trucking in Trouble

YRC WorldWide (YRCW) is tanking over 50% on bankruptcy speculation. The large trucking company has been entangled in brutal labor renegotiation’s and is at the heart of the economic downturn with their highly economically sensitive transport based business.

On Friday the company reported a $158.7MM loss which was followed up by a debt exchange announcement this morning. Investors are growing increasingly concerned that the announcement could result in an eventual Chapter 11 filing. Although the company is having cost difficulties (primarily labor related) the weakness at the company is primarily economically related. On the conference call CEO Bill Zollars detailed the economic struggles which we continue to see across the entire real economy. His comments would be most unwelcome to anyone who has bought into the recent stock market surge which is now not only very expensive, but pricing in very optimistic economic and earnings growth in 2010:

“The operating environment remains very challenging as we continue to face a difficult economy that appears to have stabilized, but is not showing any signs of sustained positive momentum. We remain cautiously optimistic that the economy has bottomed out, but it remains too early to know for sure. We’re not anticipating any growth in the economy for the remainder of this year and at least for the first half of next year.”

I think it’s safe to say that the stimulus based recovery is almost entirely non-organic. Without further aid from the government and the Federal Reserve this liquidity driven market is likely staring at a very difficult road ahead, if not the dreaded double dip.

Comments

[Timbo:]

The stock dropped today due to the terms of the debt exchange, not chapter 11 worries. The debt exchange would hand over 95% of the company to the bondholders. This is obviously not good for the common stock. However, still better than chapter 11 which will make the common worthless.

Nov 02 04:53 PM

[yrcw killer:]

i cant wait till your ship sinks you lazy teamsters deserve it!!!!!!!!!!!!!!!!!!!!...

Nov 02 05:54 PM

[YRC/ Worker!:]

its not the workers fault the company was buying companys left and right so don't blame us workers i as a teamster put my heart into Yellow freight which now is YRC!

Nov 02 06:40 PM

[Shorty348:]

YRCKiller,I would have to say that you are a coward! I can bet that you would not make that statement like a man to my face or any of the 40,000 others that are employed with YRCW. Wish death upon me the same I wish upon you. Keep running your mouth,you and your family could be the ones out in the street. Karma has a way to make things like that happen...


On Nov 02 05:54 PM yrcw killer wrote:

> i cant wait till your ship sinks you lazy teamsters deserve it!!!!!!!!!!!!!!!!!!!!...

Nov 02 07:34 PM

[temsters:]

It amazes me that one guy (Zollars) can ruin jobs, a company and a future for all that is attached and there is nothing we can do.. He has not been fired - he still makes too much and thousands of YRC employees are suffering. It is not the Teamsters fault - just another example of what happened on Wall Street - just no one wants to save a company if the employees are actually making a living wage NOT an outsourced wage.

Nov 02 08:06 PM

[untrusting ...:]

Good information. Thanks for posting it.

Nov 02 09:52 PM

[YRC/ Worker!:]

You are 100% right My friend am with you in that line! of that one whom made that Blame comment


On Nov 02 07:34 PM Shorty348 wrote:

> YRCKiller,I would have to say that you are a coward! I can bet that
> you would not make that statement like a man to my face or any of
> the 40,000 others that are employed with YRCW. Wish death upon me
> the same I wish upon you. Keep running your mouth,you and your family
> could be the ones out in the street. Karma has a way to make things
> like that happen...

Nov 02 11:32 PM

[aussiereader4:]

They buy at the peak with non organic growth. Real industrialists grow the business, they do not buy it with other peoples money. It is always this mob that fails in a crisis.

Nov 03 02:48 AM

[theendisnear:]

It's amazing to me, being in the LTL union industry since 1992, that teamsters fill the need to express their innocence in this matter. The truth is that the union trucking industry has been dying a slow death for years and with the unchanging ideology of union personal in a global market that is screaming for change, I don't see anyway for the IBT to survive the long haul. The IBT & union personal have push for unrealistic contracts that annually call for more & more concessions for labor personal. Now when they need to give a little so to save their lively hood, they start w/the typical IBT side step that it was upper management, not us innocent hard working touch labor personal. The truth is the IBT was only to willing to wet their peak when the merger was announce, and now that they own 15% of YRC, IBT has turn their back on a financially responsible company like ABF for example. ABF has honor their constructional obligation, but as ABF is trying to negotiate reasonable concessions to remain competitive in a changing industry, the IBT continues to play their idiotic tactics. So as you watch the tragic sinking to the YRC ship in the months to come, don't forget Teamsters, you have a well run & financially sound union company, that company is ABF & if you continue w/typical IBT tactics the union will be forced out of the LTL industry all together and the teamsters will get a taste of what it's like to work for one of our non-union competitors!

Nov 03 07:59 AM

[Ray Martinez:]

Teamsters are selling us out and yrcw is taking full advantage of the situation 15 percent pay cut freeze on pension what is next no medical and another pay cut lets put a stop to the bleeding and say no more real teamsters back in the day would not stand for this crap i have over 20 years in the teamsters..... and say no more abuse and no more cuts ........

Nov 03 10:04 AM

[woody96:]

I agree stand up to them, and dont take this crap anymore, that way we can stop waiting to see what happens and this company can finally just go under along with the IBT. Like to see some of you old line teamsters go try to find a job at a non-union carrier. First thing I'd look at is where you've been working. Anything more than 10 or 15 years at a union carrier and your application would go in the file never to be seen again. I wouldnt want you infecting my company with your union b.s.

Nov 03 10:28 AM

[straycat1414:]

why are some non union drivers so stupid. i work for a non union line but am smart enough to know we still need the union. what also don't understand is why the workers didn't demand zollars be removed before any cuts were taken. he is at the head of the ship and as such should be held responsible for the fall.

Nov 03 11:23 AM

[rxn7:]

The Teamsters are a dying organization. If the Teamsters are so good why have so many Teamster companies gone out of business over the years? Teamsters just blame it was bad management and not the Union. I have worked for the Union, both UAW and the Teamsters and both have failed miserably. Where does a laid-off GM, Chrysler or Ford employee go now? Teamsters are in a survival mode now, since so many monthly union dues are disappearing. When the Teamsters try to organize with a non-union company they tell you only what you want to hear. And when they try to organize a company they call non-union "brothers", otherwise they call all non-union workers "stupid" or some other unrespectable name. When a company is unionized all respect is gone for the employees, just ask a UPS employee how much they hate each other.

Nov 03 03:22 PM

[rac1974:]

They couldn't have gotten rid of Zollars very easily (Golden Parachute), so it was cheaper to keep him on as chairman, but in a way remove him from his role of running the company. As for you non-union workers, the wage you earn now is because of the fight the union waged with employers, so just imagine a world with no union. We'd all be making minimum wage....

Nov 03 03:27 PM

[Big Mark:]

For all of you non-union loud mouths out there, if it weren't for the unions, you would be making $8.00 an hour in the freight industry. We fought, and walked the picket lines for your sorry, cowardly asses. Give it a rest already. And rest assured, if and when the IBT goes under, you yourself will start to see pay cuts, loss of benifits and your companies putting the choke hold on you as well.

A 22 year Teamster.

Nov 03 04:04 PM

[Ellito:]

The union/teamster should be like a family, all on the same boat.
If the boat sinks, both will be gone.
Compromises are needed on each side in order to survive.
They all should understand that.
Good Luck.

Nov 03 08:46 PM

[rxn7:]

IBT is not going down, it is still with UPS. All the other union companies like YRC are in trouble. As far as non-union loudmouths, you might ask all laid-off Yellow, Hadley Auto Transport, CF, Industrial Freight and so many other ex-union employees who are bashing the Teamsters for their unreliability.

On Nov 03 04:04 PM Big Mark wrote:

> For all of you non-union loud mouths out there, if it weren't for
> the unions, you would be making $8.00 an hour in the freight industry.
> We fought, and walked the picket lines for your sorry, cowardly asses.
> Give it a rest already. And rest assured, if and when the IBT goes
> under, you yourself will start to see pay cuts, loss of benifits
> and your companies putting the choke hold on you as well.
>
> A 22 year Teamster.

Nov 03 09:51 PM

[wife:]

Speak for your self KIller! My husband is a driver for YRC, and took the job years ago just to get a job, first union job he had. The one thing about union, they keep every ones wages higher! My husband does not agree with all the union ideas, but he will continue to work hard to keep our home going, probably more than what "killer" can say! Just hope that it doesn't happen to you one day, it's not a good feeling!


On Nov 02 05:54 PM yrcw killer wrote:

> i cant wait till your ship sinks you lazy teamsters deserve it!!!!!!!!!!!!!!!!!!!!...

Nov 04 04:45 PM

[dkn:]

To all those mad at Killer for his comments, did you ever think maybe he is riding in the ship that is sinking? Sounds to me like he is talking about the teamsters who believe they are entitled to all the benefits that took years of back breaking hard work for some to earn. Maybe you are reading him wrong. Maybe he's one of the good guys who is being pushed to the limits and he's tired of the lazy teamsters who don't pull their weight, you know the ones who show up to work to draw a paycheck, but put little effort into earning it, those who now have the attitude that if they had to take a 15% pay cut, they would do 25% less work. The lazy teamsters do deserve it. Not the ones who have put heart and soul into their jobs, and have put their money where their mouth is in doing a job to be proud of.

Nov 06 03:34 AM

[Rage:]

this company doesnt want to survive

Nov 09 02:58 PM

[Rage:]

I worked for YRC. for 16 years, I watched them go from super profitable to super stupid in that time.
This was done on purpose because of greed, so don"t blame the teamsters.
Your only as strong as the weakest link in the chain.
That would be Zollars and his crew of greed seekers.
I've watched this company lose major accounts on a daily basis, I've witnessed first hand how the dispatchers told customers that they could not get the freight that day, using one excuse after another, because they were told to do that by management who were told by upper management e.t.c, e.t.c.
All this was done so they could change rates at will for maximum profits. We as teamster employees could only do as we were told, so blame the big dogs not us.
How come other freight companies are hiring left and right but YRC. blames the slow economy????
How come Zollars makes millions in bonuses as the company sinks. Its a fricken scam people wake the hell up!!!!!
Yellow isn't to big to fail , but they are to greedy and stupid to survive.
All those years I would do a thing called re -weighs, So if a skid was overweight we would charge higher, but if it was underweight we were told to throw the slip away instead of changing it to give money back to the customer.
I know how this place is run from the bottom up and its a fraud.
The failure however is from the top down, but yet the people on top are still there.
I feel for the workers, however I hope the company does fail, and when it does I hope all the big dogs burn for it.
YRC. loves to reward bad management and punish hard workers.
Time to turn it around.

Nov 09 03:22 PM

[Koop de Ville:]

It sounds like your husband is one of those guys who says he voted no to a pay cut, but really voted yes to save his job. But I'll tell you what! I worked for Holland for 10 years, and what yrc did was take a good company and turned it into poop. They had no business buying that company, when they already owned 4 other companies. But if I was a stock holder, I probably would have sold my interest in the company for 36 dollars a share, too. But, alas after 10 years of working for a good company, my job is no more, kaput, done, finished. After they closed red star [which was proable planned] yrc sucked us up quicker than pancakes sucking up maple syrup, then sucked everything they could out of us. They can actually go stand in the unemployment line like I have since they closed my terminal in Pittsburgh, Pa, 8 months ago. Any company is vulnerable. You are next! Its not over! They are not going to last! Koop de Ville knows what's going on. I knew from the first day that I heard that yrc was buying Holland, it was over bye-bye to a good company, USF Holland, the best of the best.


On Nov 04 04:45 PM wife wrote:

> Speak for your self KIller! My husband is a driver for YRC, and took
the
> job years ago just to get a job, first union job he had. The one
thing
> about union, they keep every ones wages higher! My husband does
not
> agree with all the union ideas, but he will continue to work hard
to
> keep our home going, probably more than what "killer" can say! Just
hope
> that it doesn't happen to you one day, it's not a good feeling!<br/>

Nov 10 07:55 PM

[wife of a t...:]

shame on you!!!!!!


On Nov 02 05:54 PM yrcw killer wrote:

> i cant wait till your ship sinks you lazy teamsters deserve it!!!!!!!!!!!!!!!!!!!!...

Nov 12 06:04 PM

[wife of a t...:]

I don't know about all this, we adjust if the weight is different....


On Nov 09 03:22 PM Rage wrote:

> I worked for YRC. for 16 years, I watched them go from super profitable
> to super stupid in that time.
> This was done on purpose because of greed, so don"t blame the teamsters.
>
> Your only as strong as the weakest link in the chain.
> That would be Zollars and his crew of greed seekers.
> I've watched this company lose major accounts on a daily basis, I've
> witnessed first hand how the dispatchers told customers that they
> could not get the freight that day, using one excuse after another,
> because they were told to do that by management who were told by
> upper management e.t.c, e.t.c.
> All this was done so they could change rates at will for maximum
> profits. We as teamster employees could only do as we were told,
> so blame the big dogs not us.
> How come other freight companies are hiring left and right but YRC.
> blames the slow economy????
> How come Zollars makes millions in bonuses as the company sinks.
> Its a fricken scam people wake the hell up!!!!!
> Yellow isn't to big to fail , but they are to greedy and stupid to
> survive.
> All those years I would do a thing called re -weighs, So if a skid
> was overweight we would charge higher, but if it was underweight
> we were told to throw the slip away instead of changing it to give
> money back to the customer.
> I know how this place is run from the bottom up and its a fraud.
>
> The failure however is from the top down, but yet the people on top
> are still there.
> I feel for the workers, however I hope the company does fail, and
> when it does I hope all the big dogs burn for it.
> YRC. loves to reward bad management and punish hard workers.
> Time to turn it around.

Nov 12 06:13 PM

[Retired Tea...:]

I have watched the unionized trucking companies close their doors for 30 plus years. These Companies have gone out for many different reasons including, Deregulation (Kennedy's personal battle with Hoffa), poor management and the failure of the Union and its members to realize that the industry needed to evolve with the ever changing customer needs. I have watched this industry go from1000 trucking companies and 450,000 employees to two companies and less then 60,000 employees ( with 20 or 30% laid-off) I got into the business for the outstanding wages and pension benefits that were won long before I got involved ,(Thanks to James R Hoffa and the 50 + year Teamsters for fighting the good fight). Everyone can take part of the blame for what has happened, the Teamster leadership for being afraid of losing the vote and not doing what was necessary 20 years ago, the Employer for being greedy and buying market share instead of earning it, the silent majority of good Teamsters that did not deal with the lazy, loud mouth, theiving 10 percent of the teamster population that gave us the bad reputation that we deal with every day in the media and failed organizing efforts.
A very proud and sad Teamster

Nov 20 06:57 AM