Less-than-truckload (LTL) carrier YRC Worldwide Inc. will name trucking executive James L. Welch, head of Dallas-based Dynamex Inc. and a familiar name around YRC, to be the company's next CEO, according to industry sources. A formal announcement is expected tomorrow.
Welch, 55, will succeed William D. Zollars, YRC's chairman, president, and CEO, when Zollars retires following the completion of the company's current restructuring efforts, scheduled for July 22. It was unclear if Welch will also assume the mantles of chairman and president. Word had leaked out about Welch's appointment on July 12, but a call to Welch requesting comment that day was never returned. Dynamex confirmed that Welch will leave the company on July 22 but did not say where he was headed.
Welch began his career in 1978 with Yellow Transportation, which has since been incorporated into the company's long-haul LTL network, known as YRC National. In 2000, Welch was named Yellow's president and CEO, a position he held until 2007.
In November 2008, Welch was named president and CEO of Dynamex, which specializes in expedited transportation services. After Dynamex was acquired in February by Canadian transport firm Transforce Inc. for $248 million, Welch was named the new company's CEO. Prior to joining Dynamex, Welch served as interim CEO of automotive transportation concern JHT Holdings Inc. and as an independent consultant.
The choice of Welch had to pass muster with the Teamsters, which represents about 25,000 YRC employees and has been deeply involved in YRC's ongoing financial restructuring efforts as well as the search for a new CEO.
In a June 29 statement to Teamster members, Tyson Johnson, head of the union's freight division, said YRC would formally name a new CEO and chief financial officer on July 22, the deadline for YRC to complete its long-planned financial restructuring. At the time, the company will announce a new eight-person board of directors, of which two members will be chosen by the Teamsters, according to Johnson's statement.
Johnson did not identify the new CEO but said he had significant freight experience and a thorough understanding of issues impacting unionized LTL carriers. Indeed, Welch is highly regarded within the industry and by organized labor.
Zollars, who has run the Overland Park, Kan.-based company since 1999, has said repeatedly that he would retire once the company completed its financial restructuring and had named a new CEO.
YRC completed a step in its restructuring plan earlier this month when it announced it received commitments for a three-year, $400 million asset-based loan program to replace its existing asset-based securitization structure. The move is designed to provide YRC with more financial flexibility and enhanced liquidity, especially during periods of seasonal traffic weakness, the company said.
The new loan program "provides the financial flexibility and run room we need to grow the business" and to give the company "more financial breathing room" in the post-restructuring period, John C. Lamar, YRC's chief restructuring officer and lead director, said in a July 11 statement.
YRC, once the nation's leading LTL carrier by sales, has lost more than $2.5 billion since 2006 and has seen its revenues almost halved since then. It lost $102 million in the first quarter. It has yet to report second-quarter results, but it is expected to post a loss.
The company came perilously close to bankruptcy at the end of 2009 and was rescued by an agreement calling for bondholders to exchange about $530 million in debt for approximately 1 million newly issued shares in the company.
