Teamsters Leaders to Review YRC Plan
The Teamsters local leadership will meet Dec. 6 to review YRC Worldwide’s proposal for a contract extension needed to obtain long-term refinancing of $1.4 billion in debt, the company said last week.
“This is really positive news,” CEO James Welch told Transport Topics on Nov. 26 after the announcement of the December meeting of local union leaders. “We had some good discussions with the union and certainly appreciate the partnership and cooperation.”
In advance of the meeting, YRC is conducting a multimedia campaign, including video and text postings, aimed at convincing the union to extend a contract that expires in March 2015.
If a tentative agreement is reached, 26,000 YRC Teamsters must decide whether to approve it. Welch expressed confidence that the proposals would be approved by local leaders, voted on and ratified.
Without disclosing details, Welch said, “We believe the proposal will move forward. We are continuing to go down a path we have been working on for some time.”
“Interest payments have been strangling our cash flow,” Welch said in the video on the driveontogether.com website.
YRC is paying about $150 million in annual debt service costs. More than 70% of that debt comes due in less than 16 months, according to a regulatory filing, forcing the need for a longer contract.
“We simply don’t have $1 billion to pay off those debts,” Welch said in the video. “Our lenders have made it clear we have to demonstrate increased consistency and stability before they will agree to refinance the debt.”
