Continued support from lender group: Last month the company announced an amendment to its bank agreement to provide for the immediate release of escrow funds generated from the company’s prior asset sales to pay down the revolving credit facility without reducing the company’s borrowing availability under the facility;
Pension fund progress: YRC Worldwide announced an agreement last month with Central States, Southeast and Southwest Areas Pension Fund (“Central States”), the largest of the company’s International Brotherhood of Teamsters (“IBT”) multiemployer defined benefit pension funds, to provide certain of the company’s real estate as collateral in lieu of pension contribution payments during the second quarter for a deferral of $83 million. Since the announcement, seven additional funds have joined as participants in the same agreement for a deferral of an additional $11 million. The company says it continues discussions with its remaining IBT multiemployer pension funds;
Teamsters discussions: The company announced today, July 9, that it has reached a tentative agreement with IBT leadership to modify the terms of the current labor agreement for its employees covered by the National Master Freight Agreement. The proposed changes, details of which are expected to be made available next week, are designed to reduce the company’s cost structure and preserve operating capital. “We appreciate the ongoing willingness of the Teamsters leadership to work with the company to identify ways to improve the financial position of YRC Worldwide during this severe economic recession,” says Mike Smid, president of YRC Inc. and chief operations officer of YRC Worldwide; and
Retention of advisers: YRC Worldwide retained financial advisers several months ago, including Tenex Capital Management, Alvarez and Marsal and Rothschild Inc., to assist in formulating its strategic plan to address its capital structure and liquidity needs. In this regard, Rothschild has initiated preliminary discussions with several significant holders of the company’s debt securities.
YRC Worldwide Inc. on Wednesday, July 8, announced additional progress in its plan to realize efficiencies from the YRC integration, restore financial strength and position its operating companies for future success:
Network re-engineering: In March 2009, the company says it took a step forward by integrating the Yellow Transportation and Roadway networks into YRC. The company says the move created a comprehensive LTL network throughout North America and allowed it to reduce facilities and costs, while enhancing services;
“We can’t control the economic environment, but we certainly can and are controlling our response to it,” says Bill Zollars, chairman, president and chief executive officer of YRC Worldwide, based in Overland Park, Kan. “Our self-help recovery plan is proactive and has the support of our stakeholders. We are taking the steps needed to manage our plan today, and position our company for success as the economy recovers.”
The company also recently earned a Kaizen Challenge Award for continuous improvement from Toyota North American Parts Organization for the second consecutive year. Kaizen is an integral component of the Toyota Production System, and to encourage its suppliers to embrace the same standards, Toyota created the Kaizen Challenge Award. The award recipients are the suppliers that most effectively used Kaizen principles in helping Toyota address its supply-chain challenges; all preferred suppliers are considered. About 20 preferred suppliers participated in the 2008 Kaizen Challenge, and YRC Worldwide was one of three award recipients in its class.
The 2008 Kaizen Challenge award recognizes YRC Worldwide for developing a plan to improve delivery efficiency for oversized and heavy parts such as truck beds, truck frames, drivetrains, transmissions and engines from parts distribution centers and vendors to Toyota dealers throughout the country. Plan elements included nationwide implementation of a standard process for equipment placement and material handling and a customer service process to coordinate delivery service with dealers. As a result of this process, damage claims and injuries virtually were eliminated, according to the companies.
“The employees of YRC Worldwide are gratified to receive this prestigious recognition from Toyota,” says Greg Reid, executive vice president and chief marketing officer for YRC Worldwide. “Not only does it demonstrate our ability to deliver innovative cost-effective solutions, it is a great vote of confidence from a valued client. We’re honored and dedicated to continue to exceed the expectations of Toyota in the future.”