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YRC Tumbles as Driver Shortage Hurts Trucker Seeking Cuts

YRC Worldwide Inc.
YRC Worldwide Inc., which has posted annual losses since 2007, has asked its 26,000 union workers to extend a labor contract and keep enduring a 15 percent wage cut to help the trucking company survive. Photographer: Jin Lee/Bloomberg

Nov. 13 (Bloomberg) -- YRC Worldwide Inc., the struggling trucker seeking crucial union concessions to help refinance debt, fell the most in two years after reporting a quarterly loss amid driver shortages and higher costs.

The shares slid 21 percent to close at $7.72 in New York, the biggest one-day decline since October 2011.

Chief Executive Officer James Welch said the quarter was “hindered” by a shortage of drivers in the company’s freight network, resulting in higher than expected overtime pay and lower productivity. The results coincide with union talks on a new labor agreement that is key to refinancing debt and ensuring the company’s recovery.

The net loss of $44.4 million in the quarter ended Sept. 30 compared with profit of $3 million a year earlier, the Overland Park, Kansas-based company said in a statement yesterday. Operating expenses rose 3.1 percent to $1.25 billion.

YRC, which has posted annual losses since 2007, has asked its 26,000 union workers to extend a labor contract and keep enduring a 15 percent wage cut to help the company survive. The trucker is currently in talks with the International Brotherhood of Teamsters.

YRC has almost $1.4 billion in borrowings from what Welch has called “numerous missteps” before he became CEO in July 2011. The company had about $170 million of cash on hand as of Sept. 30. YRC has $944 million of bonds and loans that mature in the next 16 months, according to data compiled by Bloomberg.

To contact the reporter on this story: Caroline Chen in New York at cchen509@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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