Thursday, December 4, 2008
Will it be a bath tub?
Interesting interview on Squawk this morn with Bill Zollars, the CEO of YRC Worldwide (that's Yellow Trucking for those of you who are not Squawk fans).
YRC is in a spot. Business is down double digits year over year. It's "significant. . . . It's very hard to find a metric that's headed in the right direction." He was on a year ago and presciently predicted this was coming. Sure enough he was right. He agrees that it may not end up being a V- or U-, but rather a bathtub-shaped bottom. Yikes.
Due to pension commitments Yellow has been forced to shift money from salaries over to pension benefits. They have more recently negotiated with the Teamsters union to reduce benefits to such an extent that the union pay and benefits package will soon be no better than the package for non-union members.
Unfortunately for so many, there may be a whole lot more of this in the coming months as American benefits adjust downward in order to be competitive in this World Economy.