Seeking Alpha: YRC Worldwide Will Probably Survive, But Can It Thrive?

I've made no secret in the past that I think less-than-truckload trucking company Old Dominion (ODFL) is one of the best-run companies out there. In contrast, the largest less-than-truckload carrier, YRC Worldwide (YRCW), is very definitely *not* one of the best-run companies out there. With the shares trading at only a shadow of their former value and real concerns about whether the company can manage an upcoming liquidity squeeze, a lot of investors have written off YRC Worldwide.

I'm pretty much on board with that thinking. I am not all that certain that bankruptcy is inevitable. A pre-packaged bankruptcy filing could certainly become an option as the company struggles under the weight of over $1 billion in net debt, but I suspect that the Teamsters union is going to make a deal with YRC Worldwide similar to the one it granted Arkansas Best (ABFS) - a deal that gives the company meaningful wage and cost flexibility up front in exchange for profit-sharing down the line and the labor stability the company needs to renegotiate its debt.

I'm not saying that investors should pile into YRC Worldwide with the expectation of the better than 4x returns that Arkansas Best has delivered (and I'm definitely not investing my own money here!), but I'm very curious to see how the Street will weigh out the risks of YRCW failing to renegotiate its debt (and/or failing to secure concessions from the Teamsters) and its overall lack of impressive operating fundamentals.

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YRC Worldwide Will Probably Survive, But Can It Thrive?