USF Logistics services YRC Logistics
Union Strongly Approves Extending Most Concessions, after Soundly Rejecting Earlier Proposal; LTL Giant able to Restructure Crushing Debt after Vote
SCDigest Editorial Staff
Struggling less-than-truckload carrier YRC Worldwide, recently falling back into financial turmoil after seemingly having stabilized itself over the past year, has a new lease on life after a couple of key decisions went its way over the past few days.
First was a vote by the companies Teamsters union to in some manner extend most concessions truck drivers and other workers had approved in 2010 and 2012 through 2019, versus the original sunsetting of those give-backs at the end of March, 2015.
That positive vote, after the company's 25, 000 union members had initially rejected the company's seemingly rushed proposal a few weeks earlier, in turned led to YRC being able to restructure some of its mammoth debt, which the company had told the union it would be unable at some point soon to repay without extending the cost-saving concessions.
YRC had about $1.4 billion in debt, much of which is due in the next two years. The company's creditors had previously said the company needed to curb its expenses by extending its current labor contract before it could secure the additional or revised financing.
Almost immediately after the vote, YRC was then able to a complete a previously arranged deal with investors and lenders that reduces its debt by $300 million. Separately, Moody's Investors Service said the company was working on two other measures covering $1.15 billion of additional debt.
All told, YRC is said to be operating with more debt than all the other publicly held LTL carriers combined.
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