YRC Seeks More Cost Cuts from Teamsters
YRC Worldwide Inc. officials are scheduled to meet with the Teamsters union in Dallas on Tuesday in an apparent effort to win support for more concessions, as the carrier has not made enough financial progress from continued losses.
The meeting is referenced in a letter to employees from CEO James Welch dated Oct. 30, in which he wrote that YRC’s “management has asked the [Teamsters] to work with us to support our refinancing efforts as an important next step.”
“Our lenders have made it clear the combined company has to be performing better than it is today and that we need a labor agreement that extends beyond our current expiration,” Welch wrote.
The union’s contract with YRC is slated to expire March 31, 2015. YRC faces a more immediate deadline early next year, when a portion of its $1.4 billion in debt must be refinanced through new agreements with lenders.
YRC is scheduled to report third-quarter earnings after the close of business Nov. 7.
After the losses began, the union agreed to a 15% wage cut and pension contribution concessions. Losses from operations have narrowed since late 2007, but the company’s first-half 2013 loss was $34.4 million, compared with $101.9 million the year before.
Noting that other companies in similar situations have declared bankruptcy, Welch wrote, “The better path is to refinance the debt before the due dates are upon us.”
Neither the union nor the company would comment about the meeting or Welch’s letter, although YRC did announce last week that the meeting would take place.
