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YRC Worldwide trying to contain costs

ATLANTA — Executives at trucking and logistics company YRC Worldwide Inc. said Wednesday they are working aggressively to contain costs and preserve cash to weather the deep economic downturn in the U.S.

In a presentation filed with the Securities and Exchange Commission, YRC executives said that the company has the ability to enhance its market position and improve its financial condition.

“The integration of Yellow and Roadway should significantly reduce our cost base while enhancing service to our customers,” Chairman and Chief Executive William D. Zollars and Chief Financial Officer Timothy A. Wicks said in a statement. “The flexibilities in our labor agreement have never existed before and allow us to compete more effectively with nonunion carriers, even more so with the recent wage reductions.”

YRC completed the integration of its Yellow and Roadway brands in the fourth quarter. The company reached agreement with 45,000 union members in January for a 10 percent pay cut.

The executives said the company expects $220 million to $250 million in annual cost savings from the union wage reductions. They also said the company expects $75 million to $85 million in annual cost savings from nonunion compensation reductions that became effective in January.

In 2010, the company’s operating results should improve by more than $500 million, the executives said.

The company also said it is in bank discussions to amend a credit agreement.

“The banks are very supportive of our strategic initiatives to improve our financial condition and enhance our market position,” the executives said.

They said the company is aggressively addressing its near-term liquidity and removing a significant amount of cost from the business. They added the company does not have any significant debt maturities until April 2010.

The company’s 2009 liquidity expectations include another $100 million of excess property proceeds and significant sale/leaseback transactions, including $150 million already finalized.

Kevin Jones of The Trucker staff can be reached for comment at [email protected].