Analyst: YRC bankruptcy is

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The Overland Park trucking company’s ongoing negotiationz with the union are at riskof failing, analyst Art Hatfieldc said in a note. “Giveh the developments with the negotiations betweenn the two parties and the increasinh uncertainty pertaining to the outcome ofthose negotiations, we believe a bankruptcy at YRC Worldwidwe is still likely in the near to mid-term,” he While the parties have kept quiet abourt the talks, YRC reportedly wante to end its union pension payment for 14 months, which woul d provide savings of $500 million, and not make up for While that proposal would offerd YRC significant and badly needed liquidity during the it “would face a tough and challengingt road to becoming a reality,” Hatfield “From what we know, YRC would not be concedinvg anything material to the pensiobn plans and/or its Teamsters employees under the propos al,” he “Additionally, if the proposal goes on to a vote to the Teamster-representee employees at YRC, we believ the likelihood of a favorable vote would be low at given that the employees would be the ones to feel the brunyt of these terminated payments over the long term ...
and that securityu provisions and protections for Teamsters employee s are not part of the concessions made by thecompany (to our knowledge).” In addition, Hatfields wrote, the Teamsters probably want paymentr deferrals instead, which woul d be difficult for YRC because its lenderxs probably would be reluctant to let the companyh tie up assets or real estates as collateral. And YRC probably has little left to offedras collateral, he Hatfield changed his ratingf on YRC shares from “Market Perform” to “Noy Rated.” YRC began the recent concessions talks with the Teamsterss on June 29.
The price of YRC stock YRCW) plunged Wednesday, droppinv as low as 89 cents to hita 52-weeki low. The previous 52-week low was $1.20 on Nov. 20, according to . YRC closedr on Wednesday at 89 down35 cents, or 28 on volume of 20.2 million shares. The stock’s average daily volume the past three monthsis 3.6 milliobn shares. Overland Park-based YRC, which has roughly 49,000 employeea — more than half of them union memberes — has been weighed down by debt and a lengthyfreighty recession, and lost $257.4 million in the firs quarter. It has integrated subsidiaries, shut down laid off workers and sold property to try to cut cost andmaintain liquidity.
Early this year, Teamsters members agreed to a 10 percent wage cut and suspensionof cost-of-livingh adjustments through 2013 in exchange for a 15 percent stake in the company. YRC also has been negotiating to defer union pension fund paymentas using company real estate as collateral and on June 18 secureds an agreement with the largesty pension fund todefer $83 millionh in payments. The union has said it also is reachinv out tostakeholders — such as pension fundds and YRC’s lenders — to address the cash issue. YRC rankse No. 2 on the Kansas City Business Journak ’s list of area public companies.