We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
Home » Crippled by double-digit interest rates, YRC needs financing relief to survive, memo says
newsworthy

Crippled by double-digit interest rates, YRC needs financing relief to survive, memo says

November 8, 2013
Mark B. Solomon
No Comments

For YRC Worldwide, Inc., seeking a new collective bargaining agreement with the Teamsters union in a bid to lighten its $1.4 billion debt load, the cost of the money is just as burdensome as the total amount it owes.

The Overland Park, Kan.-based less-than-truckload (LTL) carrier is financing its debt at interest rates between 11 percent and 12 percent, according to a Nov. 6 memo from a Teamsters official obtained by DC Velocity. At those rates, YRC is paying $150 million in interest, according to the memo. "YRC needs to refinance with a lower interest rate to continue to remain in business," according to the memo.

The day before at a special meeting in Dallas, YRC told the union its interest payments are larger than all its publicly traded competitors combined. The interest burden is "strangling the company," YRC said in a handout at the meeting.

Because the refinancing process typically takes 90 days to complete, it must begin by Nov. 15 to meet the first principal payment of $69 million, which is due Feb. 15, the company said. YRC has a $326 million payment scheduled in September, and another $678 million by March 2015, the month the current labor agreement expires. At the Nov. 5 meeting, YRC asked the Teamsters for a new contract that extends into 2019. The current agreement expires in March 2015.

YRC's lenders have demanded the company have a new agreement in place before they will agree to refinance the debt at lower rates, the Teamster memo said. Any new agreement must show specific targets for growth and expenditures before its lenders will act, the memo said. However, there is no guarantee that YRC will gain debt relief if it negotiates a new contract, according to a union source.

The company said it told union leaders that it faces bankruptcy without a contract extension, according to the memo.

On Oct. 30, YRC CEO James L. Welch told YRC employees, including its 26,000 union workers, that the company has no money left to reinvest in the business after it meets its interest expense and pays wages, benefits, and regular operating expenses.

Local union leaders at the meeting are in the process of briefing the rank-and-file on the discussions. One local, Local 728 in Atlanta, said on Nov. 1 that it would reject any extension to the current contract, stating that union workers have already sacrificed enough to keep the company afloat.

According to people at the Nov. 5 meeting, YRC executives said they were willing to institute a generous profit-sharing plan in return for greater operating efficiencies and a predictable wage and benefit structure. However, management was unable to provide details when pressed by the locals, according to those sources.

On Wednesday, YRC said it would delay the release of its third-quarter results until Nov. 12 in order to conduct labor negotiations. The results were originally to be released yesterday.

Transportation Trucking Less-than-Truckload
KEYWORDS YRC Worldwide
  • Related Articles

    YRC refinances $1.15 billion by closing on two 5-year loans; millions in interest savings seen

    Higher interest rates shouldn't sidetrack strong commercial property market, CBRE says

    YRC: Zollars' omission from internal memo "not significant"

Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

Recent Articles by Mark Solomon

Coming together for road safety: interview with Joshua Girard

Off the rails

Freight rate spikes shaking up the C-suite

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Schneider welcomes first battery-electric truck

  • Fred Smith is not worried about Amazon

  • RJW LOGISTICS GROUP EXPANDS RETAIL LOGISTICS OPERATION TO DALLAS

  • Maersk deploys indoor drones for warehouse inventory counts

  • Outlook 2023: What’s in store for logistics/supply chain?

Now Playing on DCV-TV

5afe63a5 7125 4318 b851 1e5738df1c91

Patterson Fan Co. | HVLS V-Series Ceiling Fan | Staging Area Air Movement

DCV-TV 4: Viewer Contributed
The Patterson V-Series is a high-volume, low-speed industrial ceiling fan that is designed to circulate a lot of air at a very low speed. These fans, ranging in diameters of 8’ all the way to 24’, are perfect for large, open spaces such as staging and shipping areas. One 24’ fan can generate a cooling effect of 6 –...

FEATURED WHITE PAPERS

  • The five best applications for robotic lift trucks in warehouse environments

  • Fulfillment Facility Improved Efficiencies by 4x

  • 3PLs: Complete Orders Faster with Flexible Automation

  • Reusable Packaging for the New Wave of Supply Chain Automation

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing