Seeking Alpha
The significant drop in YRC Worldwide's (YRCW) stock price has not been a surprise to those of us with first hand knowledge of their "inner workings". As a former executive with one of the subsidiary companies, I'm qualified to only address the Regional Group. I chose to leave on my own a month ago rather than witness the continual downfall of 2 of the 3 great brands (USF Holland & USF Reddaway). New Penn, while contributing smaller margins, continues to operate well in comparison to the industry averages. I'll get to the restructure portion after I address some background information.

The downfall (YTD O/R of over 100) of Reddaway can be attributed to 3 things. The largest impact comes from the integration of USF Bestway (O/R in 2006 was 106, while USF Reddaway's was 90). The former CEO of Reddaway resigned on his own in January to pursue other interests and the former Bestway CEO took over at Reddaway (this personnel decision is the second item impacting results). The former CEO of Bestway is a personal friend of Jim Staley (CEO of YRC Regional) and a long time Roadway employee. The third item is the unionization of Reddaway. The negotiations for the "new" unionized service centers are being finalized and favor the Teamsters and their future goal of growing their membership in the West.

USF Holland's poor results can be directly attributed to the decisions made by Jim Staley and his staff. In the past 5 months, they fired the President and VP of Sales & Marketing. They installed the CFO of the Regional group as President rather than do a search for the best possible candidate, and the VP of Sales was replaced by a long time Roadway employee (also a friend of the Roadway group running Regional Transportation). Holland had some very good internal candidates for the Sales job.

Bill Zollars needs to make a decision regarding the need for a YRC Regional Transportation group with separate executive management, separate Sales (both local and Corporate), and separate support functions (legal, HR, Pricing, etc). Not only from a cost standpoint, but the very poor decisions that have been made by the Executive group have resulted in profits being off significantly. I've always said results don't lie and there is nothing to indicate that the Regional Group will be improving their contribution to YRCW anytime soon.

YRCW needs a total restructuring to give the stock any chance of bouncing back and at least perform as well as their peers. I've been told by an insider at Yellow Transportation that they are beginning to look at ways to streamline the entire organization. I hope they do as a portion of my retirement is tied to the stock.

YRCW 1-yr chart:

YRCW 1-yr chart

Source: YRC Worldwide Needs a Total Restructuring If the Stock Is To Rebound