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Trucker YRC to save up to $100 mln if union approves contract
Dec 9 (Reuters) - Struggling trucker YRC Worldwide Inc said it expected annual savings of up to $100 million if union members vote to extend the employment of about 26,000 workers until March 2019.
The company’s shares rose as much as 24 percent in early trading on Monday.
YRC said late on Friday that leaders of the International Brotherhood of Teamsters had agreed to vote on the contract, key to the company’s plan to refinance debt. YRC had more than 31,000 employees as of February.
The company said the votes are expected to be counted on Jan. 8, 2014.
YRC, which was on the verge of bankruptcy two years ago, has launched a restructuring program to save $25 million to $30 million annually by cutting handling of shipments and transit time.
The Overland Park, Kansas-based company has to start repaying debt of $1.36 billion from February next year.
BB&T Capital Markets analyst Thomas Albrecht said in November that the employment extension was likely to be approved “as the Teamsters have no other choice if they want to preserve 26,000 jobs.”
YRC said on Monday that there would be no cuts in existing employees’ wages or their health and pension contributions under the proposed contract.
Apart from network inefficiencies, YRC has been battling industry challenges ranging from a shortage of experienced drivers to new regulations that require truckers to work shorter hours.
YRC shares were up 16.4 percent at $9.84 on Monday morning on the Nasdaq.
The company reported a third-quarter loss of $44.4 million on Nov. 12. Since then, its stock has fallen about 13 percent to Friday’s close.
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