YRC Worldwide (NASDAQ:YRCW) is a big trucker hitting some rough patches. Their recent debt-for-equity swap has helped delay a bankruptcy filing but has diluted YRCW shares to the point where they are now trading as a penny stock, risking de-listing from NASDAQ. Even their CEO admits they still face significant challenges:
YRC Worldwide cut its payroll 34.5 percent last year and a further 5.5 percent so far in 2010, reducing its workforce from 55,000 to 34,000 employees.
The nation's largest trucking operator eliminated 2,000 jobs since the end of 2009, and the cuts probably aren't over, Chairman and CEO William D. Zollars said.
YRCW's problems in returning to profitability would be less burdensome with cooperation from their unionized drivers. Unfortunately, not all of their drivers want to play along for the sake of the company's health:
Teamster employees at YRC Worldwide subsidiary Reddaway this week turned down a proposed contract that included wage and benefits cuts.
The Teamsters union confirmed its members at Reddaway rejected the proposed contract in a vote that began March 1 and was tallied March 8.
It was the second time Reddaway Teamsters rejected the 15 percent wage cut negotiated by the International Brotherhood of Teamsters and YRC Worldwide last year to help save the nation's largest trucking operator.
The intransigence of Reddaway's Teamsters makes more payroll cuts likely at YRCW. The entire trucking industry is being hurt by slack demand for LTL hauling and high fuel costs. The last thing YRCW needs to worry about are union demands that add uncertainty to its projected payroll expenses.
Disclosure: No position