YRC says it hasn't, won't apply for government bailout
YRC revealed its plans in a letter for distribution to customers.
By SAMANTHA BOMKAMP
The Associated Press
6/12/2009
NEW YORK — The nation's largest publicly traded trucking company has told its customers it hasn't applied for a government bailout and doesn't plan on applying for one, reversing intentions widely reported last month.
Media reports stirred in May that troubled trucker YRC Worldwide Inc. — which runs trucks under the names Yellow Transportation and Roadway — would ask for $1 billion in aid from the federal bailout fund, officially known as the Troubled Asset Relief Program, or TARP. At that time, YRC Chief Executive Bill Zollars told the Wall Street Journal that by applying for the funds, he hoped to spark a conversation with lawmakers about the company's hefty pension obligations.
The Overland Park, Kan.-based company's obligations are estimated at about $2 billion, a large chunk of that from multi-employer plans. Zollars claimed the pension obligations are unfair because YRC must now pay for employees who never worked for the company.
In a letter e-mailed to employees Thursday for distribution to customers, the company said it "has no current intentions of applying for TARP funds," but it does "want to address the structural inequities created by multi-employer pension plans."
A spokeswoman said no one at YRC was available to comment on the matter late Thursday.
YRC says in a fact sheet accompanying the letter that it contributes about $540 million each year to 36 multi-employer plans "supporting hundreds of thousands of retirees who never worked for YRC or our subsidiaries." It said those retirees worked for companies that are now out of business.
"With the multi-employer pension plans, when one employer fails, the obligations shift to surviving union companies," the letter said. "It is the ultimate penalty for success."
The letter went on to say that YRC is looking for government support to address the pension issue. YRC said it is in ongoing discussions with its union pension plans, but that it remains committed to funding the plans for its employees.
YRC Worldwide Inc. has laid off thousands of workers, asked remaining workers to take sizable pay cuts and made other drastic cost-cutting decisions as the trucking industry suffers from the worst demand in decades.
YRC shares finished up 11 cents, or 4.5 percent, at $2.58.
Kevin Jones of The Trucker staff can be reached to comment on this article at kevinj@thetrucker.com.
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