YRC Worldwide (YRCW) has fired the President of its national less-than-truckload service provider, YRC Freight. Jeffrey A. Rogers has been abruptly removed from his position and replaced by James Welch, CEO of YRC Worldwide, in a move described by the company as “taking the necessary steps to move our business forward.”
The company did not disclose the reasons behind Rogers’ dismissal, but it appears that its disappointing second quarter results were the tipping point – marking the fourth consecutive quarter of year-on-year declines and a loss of $8.5m. “While the regional companies (Holland, Reddaway and New Penn) continue to provide best-in-class service and more than market-competitive margins, we recognize that we have additional work to do at YRC Freight” acknowledged Welch.
The struggle to improve its financial position is certainly concerning for a business that at one time was on the brink of collapse. Yet, the current picture isn’t as gloomy as it once was. Under Rogers’ stewardship, YRC Freight reduced its operating loss from £88.5m in 2011 to $37.3m in 2012.
Following the announcement of Rogers’ departure, the initial response from financial markets wasn’t overwhelmingly positive as YRC saw its stock price fall 7%; although this has since steadily recovered. In addition, Dave Ross, a financial analyst at Stifel Financial Corp, told the Kansas City Business Journal that despite the change in management, it would not be modifying its 2013 forecast for YRC. “It does not change our general cautious view of the stock, but we would like to know the reasons behind the recent executive changes,” commented Ross.
Yet, the company’s press release highlighted optimism stating that “under Welch’s direction, YRCW has returned to its North American, less-than-truckload roots, nearly doubled its adjusted EBITDA, continued to de-risk the company’s balance sheet through letter of credit reductions, and has substantially grown into its capital structure.”
In a letter to YRC employees, James Welch said that the company must become “more aggressive in rolling out new strategies and tools for YRC Freight to achieve our collective goals.” This decision undoubtedly is an aggressive response to the company’s sluggish first half of 2013. In August, Welch said: “As we have said before, 2012 was a year of progress and 2013 is the year of performance.” Seemingly, Welch believes he is better equipped to deliver that performance himself.This content originally appeared in Ti’s Logistics Briefing Americas newsletter. A free service focused specifically on North and South America. Click here to add this to your subscription.
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