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YRC CEO: More Changes To Come After New Penn HQ Closure

FreightWaves

The CEO of less-than-truckload (LTL) carrier YRC Worldwide, Inc. (NASDAQ: YRCW) said on July 8 that more changes lie ahead for the company following its disclosure it will close the headquarters of regional LTL unit New Penn Motor Express in early September.

In a July 8 memo to employees, Darren D. Hawkins said that the changes, which have not been determined, will be unveiled in the coming months. They are part of YRC's five-year plan to sustain profitability by building sufficient density in its network and to rationalize the company's cost to serve based on its forecasted volumes, Hawkins said.

YRC, based in Overland Park, Kansas, has been developing a "network optimization" strategy, a key component of which was the completion of a five-year collective-bargaining agreement with Teamsters union members at the New Penn and Holland regional units, and at its YRC Freight national subsidiary. That contract was ratified in May. Talks with the Teamsters to hammer out a separate agreement with workers at YRC's Reddaway unit, which serves the West Coast and Pacific Northwest, were continuing as of the middle of June.

Late on Monday, July 8, YRC said it would close New Penn's headquarters in Lebanon, Pennsylvania, about 90 miles from Philadelphia, on or around September 9. New Penn was founded in Lebanon in 1931 and has been there ever since. The action was subject to federal labor law that requires businesses with 100 or more employees to give workers 60 calendar-day notice of mass layoffs or plant closures.

It is unclear how many New Penn employees will be affected. There are no provisions for employee transfers, re-assignment or bumping, New Penn said. Layoffs will commence starting on or around September 9 and run for about two weeks thereafter, New Penn said.

Speculation began almost immediately on TruckingBoards.com, a bulletin board for unionized employees, as to what YRC's next move would be. A poster who goes by the handle of "FreightMaster1" surmised that the company may close the Holland and Reddaway headquarters, located in Michigan and Oregon, respectively, and merge them into YRC's central operation in Overland Park, as it is doing with New Penn.

"If the hourly employees at these two facilities are smart, they'll contact the closest Teamsters local or the (international headquarters) and get organized... ASAP," the post read. This way, they might have an opportunity to "`follow the work,'" unlike New Penn's headquarters staff, the post said.

Separately, YRC said Tuesday it has named Jason W. Bergman as its chief customer officer, replacing Justin Hall, who left the company in June.

Bergman will head the sales teams of the company's four LTL carrier units and its HNRY Logistics subsidiary, which provides brokerage and transportation management systems (TMS) services to YRC shippers. He will also run the parent's marketing services business.

Bergman joins YRC from Dallas-based Dicom Transportation Group, where he was chief commercial officer. Bergman began his career at BAX Global, a U.S. transport firm that was acquired by German transport firm Schenker. He spent 14 years at both companies, where he rose to vice president of global sales for the retail vertical market prior to his departure.

Bergman then joined expedited transport firm Dynamex Corp., where he was vice president of North American sales, responsible for all sales and marketing functions.

One of YRC's former CEOs, James L. Welch, joined the company from Dynamex in July 2011. During his tenure, Welch was credited, along with YRC's unionized workers who agreed to contract concessions, with saving the company from a bankruptcy filing. Welch retired in 2018.

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