YRC Needs Union Accord ‘Soon’ as Nov. 15 Goal Slips, CFO SaysCaroline Chen and Thomas Black
YRC Worldwide Inc., the struggling trucker seeking crucial union concessions to help refinance debt, won’t wrap up talks to extend a labor contract by the end of this work week, Chief Financial Officer Jamie Pierson said.
The company had said in a presentation to union leaders last week that it takes about 90 days to reach a refinancing agreement with creditors and it must begin that process by Nov. 15.
“It needs to be done soon because Feb. 1 will be here before we know it,” Pierson said in a telephone interview. He declined to discuss details of the union talks. A $69.4 million bond issue matures on Feb. 15.
YRC, which has posted annual losses since 2007, has asked its 26,000 union workers to extend a labor contract and retain a 15 percent wage cut to help the company survive. The trucker is currently in talks with the Teamsters union.
The company hired an independent firm to survey worker attitudes toward YRC and its management and a “vast, vast majority” are positive or leaning positive, Pierson said, boosting the likelihood that workers will support a contract extension.
YRC has almost $1.4 billion in borrowings from what Chief Executive Officer James 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.
The company’s shares slid 21 percent to $7.72 at the close in New York, the biggest one-day decline since October 2011, after reporting a quarterly loss yesterday amid a driver shortage and higher costs.
Welch said the results were “hindered” by a lack of drivers in the company’s freight network, resulting in higher-than-expected overtime pay and lower productivity. The loss coincides with union talks on a new labor agreement that’s 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 yesterday in a statement. Operating expenses rose 3.1 percent to $1.25 billion.