YRC Worldwide Inc., about to launch what could be a make-or-break round of contract negotiations with the Teamsters union, postponed the release of its third quarter results until Nov. 12, five days later than originally scheduled.
In a statement, the Overland Park, Kan.-based less-than-truckload (LTL) carrier said the delay is needed as it talks with the union over extending its collective bargaining agreement beyond its March 2015 expiration date. "An extension of our...contract beyond the expiration is an important step in providing our customers the service they deserve and have grown accustomed to and providing our employees long-term job stability, competitive industrywide wages, and outstanding health care benefits," said James L. Welch, CEO of YRC Worldwide and president of YRC Freight, the company's long-haul unit and its largest division.
The two sides met in Dallas on Tuesday to discuss a variety of issues. The meeting had not been scheduled ahead of time. The Teamsters represent about 26,000 YRC employees. In 2009 and 2010, workers agreed to three rounds of wage and benefit concessions to keep the company out of bankruptcy protection. A source close to the situation said Teamster General President James P. Hoffa, who helped broker a controversial debt-for-equity swap at the end of 2009 to save YRC, has little patience for additional concessions.
In 2011, YRC had about $1.4 billion in debt, the result of two large acquisitions over the past 10 years and a questionable expansion strategy that took it into areas beyond its core competency. In the past several years, the company has sold various operations to narrow the focus on its core LTL business. However, it is still saddled with significant debt. About $396 million of that debt matures next year and another $548 million in 2015, according to data compiled by the Bloomberg news service.
In an Oct. 30 letter to employees, Welch said servicing YRC's debt load leaves the company with no money to reinvest in the business once wages, benefits, and regular operating expenses are paid. YRC's lenders will not agree to refinance its debt without a new labor agreement that extends beyond the current expiration, Welch said. YRC's operational performance also needs to improve for its lenders to consent to a debt restructuring, Welch said.
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