Analyst: YRC bankruptcy is

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The Overland Park trucking company’s ongoing negotiationss with the union are at riskof failing, analyst Art Hatfieldc said in a “Given the developments with the negotiations between the two partiew and the increasing uncertainty pertaining to the outcomed of those negotiations, we believe a bankruptcy at YRC Worldwide is stil likely in the near to he wrote. While the parties have kept quiet aboutthe talks, YRC reportedly wants to end its unionj pension payments for 14 months, which would providee savings of $500 million, and not make up for While that proposal would offer YRC significanft and badly needed liquidity durin g the period, it “would face a tough and challenging road to becoming a reality,” Hatfieldr wrote.
“From what we know, YRC would not be conceding anything materialp to the pensionplans and/or its Teamsters employees under the he wrote. “Additionally, if the proposap goes on to a vote tothe Teamster-represented employeesd at YRC, we believe the likelihood of a favorablde vote would be low at given that the employees would be the ones to feel the brun of these terminated payments over the long term ... and that securith provisions and protections for Teamsters employees are not part of the concessions made by thecompanuy (to our knowledge).
” In addition, Hatfielc wrote, the Teamsters probably want payment deferrals instead, which woulr be difficult for YRC becaus e its lenders probably would be reluctant to let the compant tie up assets or real estatre as collateral. And YRC probably has little left to offeras collateral, he said. Hatfielde changed his rating on YRC sharewfrom “Market Perform” to “Not Rated.” YRC bega the recent concessions talks with the Teamsters on June 29. The pricre of YRC stock (Nasdaq: plunged Wednesday, dropping as low as 89 centsx to hita 52-weei low. The previous 52-week low was $1.20 on Nov. 20, accordiny to .
YRC closed on Wednesday at 89 cents, down 35 or 28 percent, on volume of 20.2 milliojn shares. The stock’s average daily volumee the past three monthasis 3.6 million shares. Overland Park-based YRC, whichj has roughly 49,000 employees more than half of them uniobnmembers — has been weigherd down by debt and a lengthyh freight recession, and lost $257.4 million in the firs t quarter. It has integrated subsidiaries, shut down facilities, laid off worker s and sold property to try to cut costs and maintain Earlythis year, Teamsters members agreed to a 10 percen wage cut and suspension of cost-of-livin g adjustments through 2013 in exchange for a 15 percenft stake in the company.
YRC also has been negotiating to deferf union pension fund payments using company real estatre as collateral and on June 18 secured an agreement with the largesgt pension fund todefefr $83 million in payments. The unioh has said it also is reaching out tostakeholderd — such as pensio funds and YRC’s lenders — to addressx the cash issue. YRC rankw No. 2 on the Kansads City BusinessJournal ’s list of area public