Greed led to trucking company's downfall

In 2003 after 75 years in the trucking business and with merger mania taking hold in many industrial and service fields, YRC Worldwide bit the bullet and purchased Roadway, it's largest less-than-truckload competitor based in Akron, Ohio. Why would it be any different for two companies, each with $3 billion annual revenue, providing a similar nationwide freight business? Other companies in computers, banks, pharmaceuticals, telecomms all merged or acquired competitors -- all in the name of "improving shareholder wealth." Think HP buying Compaq, or Glaxo Wellcome acquiring SmithKlineBeecham. Anyone who's been employed by a company that was acquired knows they are at risk of losing their job, no matter what executives say to dispel rumors or low morale. The bottomline is that to improve the bottomline means reducing "redundant systems" like payroll departments, accounting applications, data centers, you name it.

In 2005 when Yellow-Roadway bought regional carrier USF, I remember one hyperventilating technology and former Sprint executive convey a business strategy: "6 in 2006, 8 in 2008, and 10 in 2010," referring to the increase in billion dollar revenues. This blind passion for increased growth, however was possible given the meteroic growth of large multinational companies. Why couldn't an "old school" trucking company join the big boys? Revenues increased to $9.6 billion in 2007, but dropped to $5.3 billion in 2009, following the economic catastrophe. Employees dropped from 68,000 in 2005 to 36,000 in 2009. And as an article in the Kansas City Star points out the company is seeking further concessions from union drivers and dockworkers under threat of bankruptcy.

The combined compensation for the top 8 executives of the company in 2007 was $20 million, whereas the net income for 2007 (after a special charge) was $143 million, which means 8 employees received 14% of the profits of the company while the other 63,000 received smaller bonuses and pay increases. Top executives at the company received 37 times more compensation than average paid employees.

Comments

Post a Comment

Popular posts from this blog

Community Media: Serving More Than a Geographic Region

Community media outlets like KKFI 90.1 FM in Kansas City have thrived for decades, maintaining a well-established broadcast model: high-quality studio sound broadcast to a wide geographic area serving the "community." Non-profit community radio station like KKFI, along with college radio and small commercial radio stations keep costs low by renting small studios and operating with few paid employees. These stations attract small audiences but differentiate themselves by focusing on community issues, music and culture. This focus is what defines community media, along with -- in the case of community radio -- maintaining cooperative ownership, not corporate ownership. Community radio operators always knew that "community" was more than a geographic region; it was the various cultural, ethnic, social and artistic communities for which locally-produced radio shows target. KKFI has local radio shows by or directed to African-Americans, Mexican-Americans and immigrant
Read more

Quest for a new volunteer management system at KC area food bank

Image
Note: This document is an early draft of a business case to upgrade a volunteer management system. It is not intended to be a fully organized statement of requirements, but more of a collection of features and a document for discussion. Overview Harvesters, the Kansas City area food bank, would like to improve the capability of the Volunteer App, the volunteer management system used to schedule, track and recruit volunteers and groups.  The Volunteer Services department would also like to improve the efficiency and accuracy of volunteer management by adapting their processes with new features and functions from an updated application. The current, custom Microsoft Access-based system developed a few years ago provides a rich-featured, robust solution to track individuals and groups volunteering at Harvesters. The system tracks all volunteers working in the Volunteer Outreach Center, as well as those donating their time and skills for events and in departments throughout Ha
Read more

Lee's Summit Proposes the Sanity Approach to Waste Reduction

Image
Finally! The city of Lee's Summit, Missouri took a responsible approach to trash service by replacing an all-you-can-dump-with-no-free-recycling-option to a "volume-based" approach similar to the successful service used in Kansas City, Missouri. After the service is changed, then those residents who have paid $2.50 per month to trash companies like Deffenbaugh can rely on the new service for free recycling, plus get the satisfaction that waste will be reduced and recycling increased. ...the City Council directed city staff to issue the state-required two-year notice to all solid waste haulers providing services in the City that the City is considering implementation of a comprehensive, citywide, solid waste program.  The program currently proposed by city staff includes volume-based pricing for residential trash service with unlimited, curbside recycling at no additional fee .  Under this proposed program, residents would only pay for the amount of trash they discard ;
Read more