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Cuts expected. YRC executive says Akron operation will 'remain what it is'
By Jim Mackinnon
Beacon Journal business writer
Published on Tuesday, Sep 09, 2008
Akron-based Roadway Corp. and sister company Yellow Transportation will be merged over the next 18 months into a single trucking division called Yellow Roadway, corporate parent YRC Worldwide said Monday.
Overland Park, Kan.-based YRC was originally called Yellow Roadway after the creation five years ago of what is the nation's largest trucking company.
Monday's announcement focused on YRC's efforts to intensify corporate restructuring during slow economic times that have been particularly tough on the truck freight hauler.
The new Yellow Roadway operating company is part of YRC's plan to speed up widespread integration efforts, improve efficiencies and reduce expenses — including cutting jobs and closing terminals — since Yellow Transportation bought Roadway in 2003.
The company did not say how many jobs will be affected, or when, but it did expect to have related severance costs as high as 8 cents a share.
''Akron will still remain what it is,'' said Mike Smid, president and chief executive of YRC North American Transportation in an interview with the Beacon Journal. ''It will continue to be a strong part of our business.''
Roadway has 2,327 employees in the greater Akron area, including its general offices and its shipping terminals. That makes it one of the region's largest private employers.
The newly combined Yellow Roadway division will run largely on the technology platform of Roadway, meaning that the Akron general offices and executive staff here remain a critical part of the company, Smid said.
''We will be consolidating into one company,'' Smid said.
Yellow and Roadway trucks will continue to to be marked with their current brand names ''for quite some time,'' he said.
When Roadway agreed to be bought five years ago by smaller rival Yellow in a $1.1 billion deal, executives said then that they would maintain separate Roadway and Yellow brands. The company changed its name to YRC Worldwide Inc. in early 2006, saying it better reflected the company's growing global markets, particularly in China.
YRC has gradually been combining back-office operations and making other changes to reduce expenses in the U.S.
The company said it expects to have a slight loss in the third quarter because of weakening freight demand, particularly from retailers. Industry analysts had previously estimated YRC would show a third quarter profit of 35 to 45 cents a share
Shares of YRC fell $1.21 Monday to $16.59. Shares are down 3 percent since Jan. 1, and are down 41.6 percent from a year ago.
YRC said it is speeding up efforts to combine sales forces and eliminate overlap in its Yellow and Roadway units. The company has shuffled management and closed trucking terminals this year and on Aug. 29 said it's cutting ''a couple hundred'' nonunion jobs. Details were not disclosed.
YRC might need to close about 200 overlapping trucking terminals in the U.S. as it combines Yellow and Roadway, YRC Chairman and Chief Executive Officer Bill Zollars said.
The company said last month it will reduce jobs across the country from its work force of about 60,000. The number of union positions that will be cut ''really depends on the economy,'' Zollars said.
In Akron, Travis Bornstein, president of Teamsters Local 24 that represents about 1,200 unionized Roadway workers, said it is too early to tell what impact the merger will have on union jobs.
''There's a lot of concern, no doubt about it,'' among the Teamsters, Bornstein said.
Bornstein said he and other union members had only basic information.
The International Brotherhood of Teamsters issued an announcement that the union will monitor the merger.
''The Teamsters Union will closely review the impact of today's announcement on the jobs and conditions of our members,'' Tyson Johnson, Teamsters official, said in a prepared statement. ''There is a process outlined in the National Master Freight Agreement that the union will utilize to ensure that our members are treated fairly throughout what will inevitably be a very difficult process.''
Bloomberg News contributed to this report. Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
Akron-based Roadway Corp. and sister company Yellow Transportation will be merged over the next 18 months into a single trucking division called Yellow Roadway, corporate parent YRC Worldwide said Monday.
Get the full article here.
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Posted 05:59 PM, 09/09/2008
What about the Houston Terminal??
