Election results at largest Teamster trucking employer delayed
A high volume of ballots is likely to extend vote counting in a Teamsters election crucial to the survival of trucking giant YRC Worldwide into the weekend.
"Due to the high number of ballots cast, results are not expected until tomorrow afternoon," the Teamsters union said Friday in a statement on its Web site.
Ballots were mailed Oct. 7 and counting began Oct. 28.
YRC Teamsters are being asked to approve wage, benefit and pension concessions that could save the company more than $350 million a year, according to analysts.
The plan would extend a 15 percent wage cut through 2015 and slash company pension contributions suspended last year by 75 percent when they resume.
In return, the international union would receive broad power to review and even reject decisions made by the company as part of its restructuring plan.
As many as 25,000 union jobs are at stake. YRC Worldwide is the largest Teamsters employer in trucking. It has made enormous job cuts in the past two years.
"The bottom line is we have no future with a 'no' vote," YRC Worldwide Chief Operations Officer Michael J. Smid said in an Oct. 4 letter to employees.
If Teamster workers reject the plan, YRC Worldwide could shut down or merge or pare back some of its operations, such as regional carrier New Penn.
The company could also try for a second vote. Last year, it was forced to go back two or three times to smaller bargaining units to win approval for concessions.
But it would have only two months before pension payments suspended last year kick in again Jan. 1, costing the company as much as $90 million a quarter.
That would consume YRC's cash by the third quarter of 2011, analysts warn.
It's also not clear whether the less-than-truckload operator would be able to hang onto sufficient customers if the Teamsters vote down the restructuring plan.
"If the restructuring does not pass, customers (will) lose confidence in our ability to handle their business," Smid said in the Oct. 4 letter to YRC Worldwide employees.
"The resulting shipment loss will make it impossible for YRC Worldwide to continue in business," said Smid, who is also president of long-haul subsidiary YRC.
If the plan is approved, YRC Worldwide and its lenders would face other hurdles, including raising $300 million in new equity financing by the end of 2010.
Election results at largest Teamster trucking employer delayed
The agreement would provide for a second debt-for-equity swap, giving a lager share of the company's stock to its banking group and the Teamsters union.
At least one Wall Street investment analyst cast doubt on the company's ability to survive with or without rank-and-file approval of the restructuring plan.
"Even if the vote passes, there is no guarantee the company will survive much longer," said David Ross, a trucking analyst with Stifel Nicolaus.
"We believe the company will either go out of business within a few months or have to give the company to debt holders and new money," he said in a note to investors.
That would reduce the value of stock held by current shareholders, but give the company a chance to stay alive and benefit from a stronger economic recovery.
-- Contact William B. Cassidy at wcassidy@joc.com.
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