Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why YRC Worldwide Shares Dropped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of transport company YRC Worldwide  (NASDAQ: YRCW  ) fell as much as 25% in trading today after unionized workers rejected a new contract offer.

So what: The International Brotherhood of Teamsters did not approve a memorandum of understanding to extend the contract with YRC, putting labor in flux. Management said one reason the union didn't support the extension was that it wanted YRC to reduce debt, something the company did on Dec. 23 in an agreement with debt holders. By that date, many union members had already turned in ballots, so the current balance sheet may not be such a deterrent if the vote were taken again.  

Now what: The December agreement to reduce the company's debt outstanding by $300 million was contingent on the union ratifying a contract extension, so right now both debt and labor have uncertainty. It doesn't appear that either side wants to fight so hard as to sink YRC Worldwide, so it'll just take time to get an agreement done.

The losses YRC has been delivering will keep me out of the stock today, but I don't think today's drop is a reason for bullish investors to panic. I think all parties will give a little and get this issue resolved eventually.

Stock you can buy today
If you're looking for some great long-term investments, our CEO, legendary investor Tom Gardner, has permitted us to reveal "The Motley Fool's 3 Stocks to Own Forever." These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 11, 2014, at 12:34 PM, n8cal wrote:

    No the reason it was turned down was because the teamsters have given billions in concessions and the company did NOT pay down any of the debt ! They ( YRC ) could be debt free now and no one knows what they did with all the money. They say they don't have drivers but they are not looking for drivers either. They actually want to use cartage drivers to deliver the freight that they don't have to pay insurance for , a decent wage and also they don't have to pay for the equipment, maintenance or insurance . If the contractor gets hurt, it's on them. So it is a lot bigger problem than they publicly show. Yrc want to be able to fire workers easier so they can use more cartage, not because of absenteeism . They could hire people if needing workers was the problem. The want to get rid of workers . Also I think that the average teamster is tired of being lied to repeatedly. And the company going to the press and saying the teamsters is the problem .The company is trying to screw their best asset , the teamster which has years of experience . They basically want to out source our work but want to look like they are the good guys , and we are not .

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2791133, ~/Articles/ArticleHandler.aspx, 9/3/2015 5:43:24 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

Today's Market

updated Moments ago Sponsored by:
DOW 16,374.76 23.38 0.14%
S&P 500 1,951.13 2.27 0.12%
NASD 4,733.50 -16.48 -0.35%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/3/2015 3:59 PM
YRCW $15.67 Up +0.12 +0.77%
YRC Worldwide, Inc… CAPS Rating: **