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Originally Posted by Top Flight  IF YRC would let Holland and New Penn go back to the way they were (A money maker) they would both be able to bail YRC out of the hole they are in..But I do not see that happining as it is a good idea.
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They can't. Here's why (from my experience). Yellow buys XYZ Company. Whatever price they agreed to, they now assign from the Yellow Books to the newly bought company to pay back to the corporation. Say xyz company was debt free and profitable. Now, Yellow will mortgage the terminals of the newly bought company, borrow money against the equipment-- and guess what? Now it's the newly bought company that underperforms (for it must repay debt it didn't have.)
Yellow will next take Underperformance Charges against the brand name, saying they bought a bad company. And Yellow will redo their corp taxes several times until they have drained every last drop off the new now debt-ridden company. The only thing they used to do that now they cannot is ask for a wage consession. We at Preston "gave back" (I hate that term-- you cannot give back what you never had) an amount over the 6 years Yellow owned us , equal to the price they paid for us AND Saia. And then they kept Saia.
They've done this with Preston, Saia, Dugan, Holland, New Penn, and Bestway. It's the Yellow way. I'm surprised they didn't pull this one on Roadway; Big R's Head Honchos must be smarter than Billy Z.......
What YRCW apparently did Not plan on was a bad economy. Almost 2 Billion in debt drags when you can't fill all the trucks and you're experimenting with combining things and buying every new system under the sun...
Great post Jimmy
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