YRC Worldwide Inc. North America's largest trucking company said on Thursday that regional subsidiaries would close a total of 27 service centers, resulting in charges of $10 million. The subsidiaries - USF Holland and USF Reddaway-are likely to close the centers on Feb. 22 and the majority of the charge is expected in the first quarter, YRC Worldwide said in a regulatory filing with the U.S. Securities and Exchange Commission. The move is part of a previously announced $100 million profit improvement plan at Overland Park, Kansas-based YRC.
LTL trucking is an asset-intensive business using large warehouse facilities where loads are exchanged. YRC calls these "service centers." Six service centers at USF Holland are to close, while USF Reddaway will shut down 21 facilities. YRC has struggled with integrating USF Corp, which it bought in 2005, into its network. In January YRC reported a fourth-quarter noncash impairment charge of $782 million, most of which was related to the declining value of USF.
Some analysts have said that to improve its performance, YRC needs to shut down service centers and lower the labor costs of its largely unionized workforce. So, as part of its plans to shut 27 service centers it will cut approximately 1,100 jobs. YRC has a total work force of around 60,000 people.
YRC said that as part of the restructuring plan, more than 600 trucks and 1,200 trailers would be removed from its fleet. In a presentation to analysts that was filed with the U.S. Securities and Exchange Commission, Chief Executive Bill Zollars said the company expects cash proceeds from property sales of between $8 million and $10 million.
Timely, incisive articles delivered directly to your inbox.