(Refiling to insert dropped word "of" in 1st paragraph.)
* Shares jump 16 pct
* YRC says labor agreement should save $350 mln annually
* Company still faces financial challenges
By Carey Gillam
OVERLAND PARK, Kan., Nov 1 Shares of YRC
Worldwide Inc YRCWD.O raced higher on Monday after the top
U.S. trucking firm said its workers had agreed to extend
financial concessions considered key to the company's survival.
The agreement with the International Brotherhood of
Teamsters should save YRC, the nation's top less-than-truckload
carrier, an estimated $350 million annually, according to a
statement by YRC officials.
The pact is "an important step in the company's
comprehensive recovery plan," they said.
"This new labor contract positions our company for improved
performance by providing a long-term market competitive cost
structure as well as enhanced efficiency," said Mike Smid, YRC
chief operations officer.
The Teamsters said the agreement would save 25,000 jobs.
"As painful as the sacrifices are on an individual level,
our members understood that by approving this restructuring
plan they would be setting the stage for the company's existing
lenders to do their part and make this company an attractive
investment for new investors and preserve their jobs,"
Teamsters General President Jim Hoffa said in a statement.
The new labor contract extends the previous agreement,
slated to expire in 2013, until March 31, 2015.
While the deal removes some hurdles to the company's
recovery, YRC still faces financial challenges, including a
need to raise at least $300 million in additional equity by the
end of the 2011 first quarter, said Deutsche Bank analyst
Overland Park, Kansas-based YRC, which has been struggling
to stay out of bankruptcy, said in October that its operations
were improving after it was nearly forced into bankruptcy last
YRC shares were up 16 percent at $5.12 in early trading on
News of the labor deal angered one of YRC's top
competitors, ABF Freight System Inc. ABF, the largest
subsidiary of Arkansas Best Corp ABFS.O, said it was filing a
lawsuit on Monday against the Teamsters and YRC for violating a
collective bargaining agreement that covers most unionized
trucking employees in the United States.
(Reporting by Carey Gillam; editing by John Wallace)