YELLOW ROADWAY TO APPLY FOR FEDERAL BAILOUT FUNDS (Request $1 Billion in U.S. Aid)

http://gangbox.wordpress.com/2009/05/16/yellow-roadway-to-apply-for-federal-bailout-funds/

from the WALL STREET JOURNAL:

* MAY 15, 2009

YRC to Apply for Bailout Funds
Amid Pension Pressure, Trucking Company Plans to Request $1 Billion in U.S. Aid
By ALEX ROTH and ROBIN SIDEL

YRC Worldwide Inc., one of the nation’s largest trucking companies, will seek $1 billion in federal bailout money to help relieve pension obligations, the chief executive said Thursday.

The move comes as the trucking giant struggles to shore up its finances. The company’s ability to weather the recession will have significant implications for the trucking industry and large customers across the country.

Chief Executive William Zollars said the company will seek the money to help cover the cost of its estimated $2 billion pension obligation over the next four years. Under a complicated system that Mr. Zollars labeled unfair, roughly half of YRC’s contributions to a multi-employer union pension fund cover the costs of retirees who never worked for the Overland Park, Kan., company.


Reuters

YRC faces a $2 billion pension obligation over the next four years, and will seek Troubled Asset Relief Program money. Above, YRC worker Keith Graham loads a truck in Holland, Mich., in September 2007.

By applying to the U.S. Treasury for money under the Troubled Asset Relief Program, Mr. Zollars said he hopes to “get the conversation started” with federal authorities about reducing the company’s pension obligations. He said YRC will submit an application to the Treasury Department as early as Friday.

Experts say the company’s odds of actually getting TARP money appear to be slim. A Treasury spokesman didn’t return a call seeking comment.

“My experience dealing with Treasury is that with TARP funds they are relatively narrow in how they view things,” said Frank Bonaventure Jr., a lawyer who has represented banking clients seeking these funds. “They have not been very expansive in terms of how it is applied and what industries could get it.”

The move comes at a time when YRC is taking steps to cut costs and raise cash. With $1.5 billion in revenue for its most recent quarter, YRC owns at least 20% of the national market share in the less-than-truckload industry, in which trucking companies combine multiple customers’ loads into a single truck.

FULL story at link.

on second thought, maybe it is.

ellen fl