Summary
After receiving feedback from customers, YRC Worldwide yesterday issued a correspondence that says they won’t ask for or take TARP (Troubled Asset Relief Program) funds. As written on 5/15 by my colleague John Schultz and me, there were plenty of issues with the request at ground level. YRC will continue to highlight the Teamster Union pension payment issues.
Analysis
In an e-mail to employees to Thursday for discussion with customers, the company said it "has no current intentions of applying for TARP funds," but it does "want to address the structural inequities created by multi-employer pension plans." This is after many in the industry rolled their eyes at the reported potential request.
As noted previously, it was believed that YRC was going to ask for $1B, hoping to start a conversation about the estimated $2B Teamster Union obligations they are on the hook for. Of special concern to YRC is the commitment to pay for members in the multi-state fund from now defunct companies who never worked for YRC companies. YRC is asking for government assistance in addressing this - and probably will get something in some form.
Recent national surveys are showing that DC-spending spree is growing in unpopularity. In the business world, it that old adage that people can vote with their feet when they don’t like something. In this case it was customers, something YRC can’t afford to lose. It goes to show that in some cases - smart people listen. We can also do it at the ballot box, but that may be a different issue.
