Yellow | Shake Up at The Top.

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Anyone know what went down today In KC. today. Heard they streamlined the chain of command, knocking out a few VPs. Yellow has smart people at the top .They weren't happy with the numbers for 1st qt. They will make adjustments from top to bottom to get the numbers they want.:cool:
 
Well now, I what this talk of "workman flexibility" involves? And the contract talk in the article below says that Pensions will get attention vs wages.
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Traffic World

Yellow Transportation is slimming down.

Faced with rising costs, deteriorating yields and incessant demands for faster service, the flagship carrier of YRC is undergoing a "management realignment" that reduces its regional divisions from 14 to seven.

The move may be necessary for the survival of one of the few remaining unionized, long-haul LTL carriers in a transportation market that is increasingly regionally focused and structured around next-day service.

The realignment changes Yellow's managerial hierarchy, eliminating about 75 managerial and nonunion positions - about 2 percent of that workforce - and more tightly binds its guaranteed and expedited service offerings as well as its safety and human resources functions. Overall, it will yield $7.5 million in annual savings, said Yellow President and CEO James L. Welch.

"I can promise you that's not the driving reason that's causing [the realignment]," Welch told Traffic World. "It's simply a decision that I made to put our company in a better position to respond to our customers' needs and to have a greater constancy of purpose with what we're doing."

Better positioning Yellow for next-day deliveries is one of the drivers. The carrier launched next-day service in February 2005 in the Midwest, where 41 facilities now offer the service. It will expand that service in the Northeast this year and has identified facilities that will participate, Welch said.

"If you look at the divisions that we are creating, there's definitely some thought that we put into it that allows us to be better positioned as we expand our network to take advantage of next-day lanes," Welch said.

"It's certainly the fastest growing piece of our portfolio of service offerings and we want to continue to make it one of our top priorities. We think [the realignment] will make us more effective in that particular market. That was just one of several reasons why we wanted to make a reorganization."

This is the third adjustment Welch has made in six years as Yellow Transportation's president.

"We certainly see this as a very positive step in that we're trying to continue to streamline the way our field organization is set up in order to take advantage of what's continuing to change in the marketplace," Welch said. "It really is an adjustment to how we feel like we can best run our operation in the field and better serve our customers."

The realignment is being undertaken separately of YRC's efforts to reduce costs by finding "synergies" in the operations of Yellow, Roadway Express and the USF regional carriers, Welch said. YRC plans to reap $450 million in cumulative cost reductions from those synergies by 2008.


In an internal memo obtained by Traffic World, the $3.4 billion carrier named seven divisional vice presidents and reported that three former area vice presidents have retired. It named a company-wide senior vice president of business development and strategy, Steve Defenbaugh, formerly senior vice president of sales and marketing, describing the new position as "critically important" going forward. The memo from Welch describes a customer-driven motivation for the realignment.

"Our customers' distribution processes are in a continual state of change in response to the expansion of the global economy," Welch said in the memo. "As a result, we must dynamically change Yellow Transportation so that we are in the best position to proactively meet the needs of our customers. To that end, it is time for us to collectively take the next step forward for our organization."

The realignment creates Eastern, Northeast, Central, Midwest, South, Southwest and Western divisions. Each division continues to have two area directors of operations and two area sales directors, reporting to the division vice president. Regarding Yellow's sales organization, "we feel very strongly that our current alignment of sales resources should remain intact. Therefore, virtually no changes will occur with sales," Welch said in the memo.

Each division will now have a director of guaranteed and expedited services. "These directors will have a solid reporting relationship to their senior director of guaranteed and expedited services. However, they will have a heavy dotted line reporting relationship to their respective division vice president," Welch wrote.

Trucking analysts and consultants said the changes are much needed.

"It's a smart move and one where they have absolutely no choice," said Lee A. Clair, with management consulting firm
Norbridge. "They're a union carrier, and as such, they're a high-cost carrier. They have to continually find ways to take costs out of the system from things other than labor.

Restructuring and thinning out the management oversight has always been a good way to do it," Clair said.

"Shippers will be pleased if the outcome of this realignment is better service," said Arthur E. Cole, president of logistics firm Edwards & Drew. "Most shippers have really been disappointed with Yellow's service for years and years. Even before the Roadway acquisition, they were not looking at Yellow as their high-service national carrier. That was usually somebody else."

Cole added, "Wall Street may be pleased because it appears that they're addressing ways to integrate their operations and to really fulfilling the promise … of this excellent franchise they have. They've got the potential to set the standard of the LTL industry in terms of service, particularly in pricing power, but right now it's just potential."

Satish Jindel, president of SJ Consulting Group, said Yellow is reshaping itself around tighter transit times.

"It's the right thing to do," Jindel said. "Before, if they went 1,000 miles in three days, now they're doing it in two days. The region that was only covering two-day points now should be bigger. …They should be expanding the regions because they're adding other regions as part of the service."


Yellow's 35-percent dive in operating income for the first quarter may have expedited, but did not drive the changes, observers said. Half of that shortfall stemmed from a loss in volume associated with inventory adjustments by big-box retailers, YRC Chairman, President and CEO Bill Zollars said. Another 25 percent came from deteriorating yields.

However, the growth rate of Yellow's adjusted operating income has been trending down for much of the past year, despite rising volume and revenue, as costs increased.

Speaking at the Bear Stearns Global Transportation Conference in New York this month, Zollars said YRC will attempt to win more "workman flexibility" from its employees to perform premium services and will emphasize pension contributions over wages when it negotiates its next master freight agreement with the Teamsters union; the present contract expires in April 2008.

He expects YRC's total revenue - from Yellow, Roadway and its regional carriers - to hit $10 billion this year.

The realignment does not signal that Yellow is overhauling its model from that of a long-haul, two-to-four-day carrier to emphasize regional markets and next-day deliveries. Zollars said Yellow will expand its regional next-day product offering east of the Mississippi, but leave it at that.

Next-day service is a highly valued product that pays well, Clair said, but it is just one piece of the business mix that Yellow needs to survive due to its labor cost disadvantage with other carriers.

"Yellow's done an outstanding job of taking what is a high-cost union structure and finding ways to run it more efficiently and stay in the market," Clair said. "That's why they're one of the last union carriers standing. Every time you remove a barrier, a seam in your system between the regions, between the various pieces, you have an opportunity to improve the service.".

Sharing the podium with Zollars in New York, Robert A. Davidson of Arkansas Best, the other major unionized LTL carrier, contended the difference in labor costs between union and nonunion carriers is narrowing because of the intense need to recruit truck drivers. But Clair believes Yellow would need a "labor miracle" to level the playing field with competing LTL carriers.

"They know they have a major strategic disadvantage and a major problem in the market in trying to compete because of the unionized cost structure," Clair said.

"They're running up the down escalator. As soon as they stop and stand still, the labor disadvantage will sink them."
 
Anyone know what went down today In KC. today. Heard they streamlined the chain of command, knocking out a few VPs. Yellow has smart people at the top .They weren't happy with the numbers for 1st qt. They will make adjustments from top to bottom to get the numbers they want.:cool:
Boy I hope Wongway's drinking buddy Jamie was not part of this house cleaning!!!!
 
YEP !, I was reading and thinking they were referencing the old days to the new way. Not so, this is old news. Good catch KK.
 
This forum thread is 9 years old..KK
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Anyone know what went down today In KC. today. Heard they streamlined the chain of command, knocking out a few VPs. Yellow has smart people at the top .They weren't happy with the numbers for 1st qt. They will make adjustments from top to bottom to get the numbers they want.:cool:
The only thing shaken at the top is the cocktail mixers:very drunk::wee::eagerness::wee::wtflol:
 
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