For those who don’t know, YRC Worldwide (YRCW) is the former Yellow Roadway. Here is some of what the Wall Street Journal is reporting:
“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. 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.”
Awfully presumptuous of him, don’t you think, applying as a trucking company without any indication Treasury would ever widen TARP to include any U.S. corporation? I would be shocked if this were approved, and if somehow it is, TARP would be completely out of control.
“Mr. Zollars declined to comment on YRC’s specific strategy in seeking the funds, other than to say the company shouldn’t be forced to pay the pension benefits of employees who never worked for YRC.”
This seems like an odd explanation. I don’t know the details of the “complicated, multi-union” pension plan in question, but it strikes me as probable that if half of YRC’s contribution goes to people who didn’t work for YRC, then the other truckling companies are in the same boat and are paying for some of YRC’s former employees. Does Zollars want to stop paying for non-YRC pensions while still having his competitors subsidize YRC’s pension obligations? The whole thing is bizarre, to say the least.
Full Disclosure: No position in YRCW at the time of writing, but positions may change at any time