YRC to talk to Teamsters on modified labor agreement

* Talks to modify cost structure, preserve operating capital

* Shares up 1 percent.

CHICAGO, June 25 (Reuters) - Struggling No. 1 U.S. trucking company YRC Worldwide Inc (YRCW.O) is to open talks with the Teamsters union on a modified labor agreement, the company announced late Wednesday.

The Overland Park, Kansas-based company said talks would focus on finding ways to reduce the less-than-truckload operator's cost structure and "preserve operating capital going forward."

Less-than-truckload (LTL) companies consolidate small loads into a single truck.

"Entering into discussions with the Teamsters is another important step in our overall plan to strengthen our financial position during this difficult economic climate," Chief Executive Bill Zollars said in a statement. "We have made progress with various stakeholders ... to modify agreements, and we are grateful to the Teamsters for their willingness to consider further adjustments to our contracts."

Like the rest of the U.S. trucking sector, YRC has been battered by the recession, which has exposed problems the company has had integrating acquisitions and optimizing its large national network.

As part of its efforts to weather the downturn, YRC has closed some facilities and shed jobs. In January its Teamsters-represented workers agreed to a 10 percent wage cut in return for a 15 percent stake in the company.

Last week the Central States multi-employer pension fund agreed to let YRC use some of its property as collateral instead of cash payments into the fund.

YRC shares were up 1 percent at $1.86. (Reporting by Nick Carey; Editing by Phil Berlowitz)