Summary
YRC Worldwide is following others in the heavily unionized sector to get on the Obamanomics TARP (Troubled Asset Relief Program) train where the probable payback for his election support is to bail out state pensions, automakers, the insurance industry, etc. - and now trucking? YRC President Bill Zollars’ has the guts to ask for help (why not), but is also says more about the bumpy road they are on. I cannot wax poetically like our colleague Mr. Schultz, but will give another penny worth of input herein (hopefully not Billions of them).
Analysis
I have a fondness and bias for Yellow and Roadway from my past. Roadway offered me a job out of college in the ‘70’s and Yellow was a great customer to an industry supplier I was with for years. My Teamster experience when I drove trucks during college summers was not one to write home about, but it’s sad to see how all of these have converged in such a negative result.
All that said and wanting to see YRC successful, this sends a signal that I didn’t want to see for a variety of reasons. Of course, nobody is betting that YRC will actually get TARP monies, but we are seeing all kinds on new definitions as to what “IS” is from DC. Are the Teamster’s a troubled asset (or liability)? Zollars asking for help because they are being saddled with non-YRC Teamsters costs is a good question within the Teamsters bubble, but…
This then gets into the question of who really would support the pension funds in any case - but we know that answer (us). After that, we get into the ripple effect of other transport companies asking for bailouts. We should however remain clear what this is for - first bailing out the Teamsters and second throwing YRC another lifeline.
As a business-person and a taxpayer, we can’t keep doing all the stuff we have already signed up for, let alone something like this! If we follow the template being laid out by TARPed General Motors and Chrysler, a Chapter 11 probably is the best approach anyway. Perhaps we should cut to the chase!
