DC Velocity - May 2010

ing experts on trucking labor relations. Belzer says he doesn’t recall the Teamsters or any trade union playing such an active and pivotal role in ensuring a company’s survival. He called Hoffa’s 11th-hour push to force Goldman’s hand on the derivatives transactions an “amazing” achievement.

Rough road ahead

But it came at a price. The wage cuts and the suspension of pension contributions will cost YRC’s rank and file about $1.5 billion through 2013, according to a 2009 estimate from investment firm Stifel, Nicolaus & Co. As with all YRC common shareholders, the Teamsters’ original equity stake was wiped out following the debt-for-equity swap. Though YRC workers are expected to receive options worth between 30 and 35 percent of the new equity, there is considerable doubt as to its value.

One analyst, Jon A. Langenfeld of Robert W. Baird & Co., values YRC stock at zero. YRC stock closed March 8 at 49 cents a share, and the company faces delisting from the Nasdaq stock exchange if it can’t get its stock above $1 a share for 10 consecutive days between now and Aug. 30.

YRC is scheduled to resume pension payments in January
2011, at a cost of about $15,000 for the year per Teamster
employee. Given the weak market for less-than-truckload
(LTL) services and continued cut-throat pricing, some
wonder if a company saddled with hundreds of millions in
losses can meet an estimated $500 million pension com-
mitment next year.

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