YRC narrowed its quarterly loss to 39.6 million on $1.243 billion revenue, compared with a net loss of $104.2 million on $1.251 billion revenue in the 2012 second quarter. Consolidated operating income decreased slightly from $15.5 million to $14.3 million, or by $1.2 million.  Operating income in 2013 included a $1.3 million loss on asset disposals compared to $6.5 million gain on asset disposals in 2012.

YRC, which has lost in excess of $2.6 billion in the last six years, has continually improved its long-term financial picture since James Welch replace Bill Zollars as CEO two years ago. Welch emphasized on a conference call that YRC is continuing to improve its long-term financial picture despite slightly higher costs associated with capital expenditures and huge operational changes YRC is rolling out designed for long-term financial improvements.

The Overland Park, Kan.-based company reported adjusted earnings before interest, taxes and debt (EBITDA) for the second quarter of 2013 of $74.7 million, a $4.6 million improvement over the $70.1 million adjusted EBITDA reported for the second quarter of 2012.  Included in adjusted EBITDA for the second quarter of 2013 is a $6.3 million charge related to the network optimization that was implemented at YRC Freight in May 2013.

Welch described the quarter as "steady progress" toward it long-term objective of regaining "a leadership position in the LTL industry."

In the second quarter, Welch said, YRC made investments in newly leased tractors and trailers, completed its rollout of 10,000 mobile handheld productivity devices for city drivers, and completed the second largest network optimization in YRC Freight history.  Welch called those expenditures "the first meaningful investment in equipment in four years."

YRC Freight posted a 1.5 percent improvement in revenue per shipment, an indication it is shedding unprofitable freight as its overall revenue declined by 2.9 percent. YRC's regional carriers (Holland, New Penn and Reddaway) had a 0.1 percent increase in revenue per shipment as operating revenue rose 3.5 percent.

YRC Freight reported an operating loss of $8.5 million and an operating ratio of 101.1, a slight decrease over the 2012 second quarter. YRC's regional carriers reported an operating profit of $25.2 million, a 10 percent increase over the year-ago quarter. The regional group posted a 94.3 OR, a performance Welch called in line with "market levels."

"While the regionals continue to excel in their markets, YRC Freight faced some headwinds during the implementation of the network optimization plan," Welch said.

YRC recorded a one-time charge of $6.3 million related to the network optimization, which Welch called "a small investment in what we anticipate will be approximately $25 to $30 million in annual savings."

Welch said 2012 was "a year of progress and 2013 is the year of performance, and we continue to deliver on that performance. Going forward, we remain focused on delivering incremental productivity improvements, consistent service and equally strong operational results. 

"We are confident in the position of our company and believe we have opportunity to grow the business, improve profitability and deliver high-quality service for our customers," stated Welch.

Wall Street was mixed on YRC's turnaround story. Its stock, which had zoomed from $5 per share in May to a high of nearly $37 in early July, fell 21 percent on the day of YRC's latest earnings announcement to around $22 per share. Independent analysts were much more bullish on YRC’s long-term future.

"I give credit to both union and management," Satish Jindel, principal of Pittsburgh-based SJ Consulting, told LM. "Management can only do so much. You have to rally the people and have them believe in the management. Management gave them a reason to believe."

Safety continues to improve at all YRC units. Its workers' compensation costs are falling as it continues to settle more claims than are filed. The net result is a reduction in the number of open claims and a reduction in associated liabilities and outstanding letters of credit supporting these programs, Welch said. 

In the second quarter, YRC reduced its outstanding letters of credit by $43 million, or 10% from $429 million to $386 million, according to Welch.

The most challenging part of YRC's turnaround remains its long-haul YRC Freight unit, which is the combination of the former Yellow Freight and Roadway units.  Last May, it implemented the second-largest network optimization plan in its history of our company, according to Jeff Rogers, president of YRC Freight.

"During implementation, our execution was hampered due to increased shipment volumes we were experiencing at the time," Rogers explained. "Service, operations and financial results were adversely affected as a consequence. 

"The good news is the optimization will increase density in the network, result in fewer touches of shipments, increase load averages and reduce line-haul miles.  The great news is the change is complete, service is moving back to pre-change levels, and this is absolutely in the best interest of our customers and our long-term success," said Rogers.

At June 30, YRC's liquidity, including cash, cash equivalents and availability under its $400 million asset-based loan facility (ABL), was $218.7 million.  The ABL borrowing base was $378.9 million as of June 30, 2013.  A year ago, that liquidity was $248.7 million.  For the six months ended June 30, 2013, cash used in operating activities was $18.2 million as compared to $16.6 million for the six months ended June 30, 2012.

"We were able to slightly improve liquidity during the second quarter despite increased cash outflows for capital expenditures, non-union pension payments, and unemployment tax payments," said Jamie Pierson, YRC's chief financial officer. "Our operational improvements and focus on working capital management continue to provide us with sufficient liquidity."

YRC has couple of debt maturities coming due in early and late 2014 and then again in early 2015.  Pierson said it recently retained Credit Suisse, in combination with its financial advisor, The MAEVA Group, to assist in developing "a broad range" of refinancing and recapitalization options.

"We have a number of constituents to consider and we are currently in the process of evaluating all alternatives," said Pierson.

August 20, 2013: Hoffa and the Freight Division are parroting management's line, aiming to divide, discourage and defeat members.

In early August, ABF Teamsters in the Central Region, Carolinas, Western Pa., and a couple of other supplements are voting again on the contract.

A number of Teamsters are speaking out against the concessionary deal. Some have made up leaflets comparing the concessionary deal to what Hoffa initially said they would bargain for.

The initial contract vote was mishandled and suspect, with members getting UPS ballots, no ballots, wrong ballot instructions and with the results being looked into presently.

Meanwhile Hoffa and the Freight Division are parroting management's line, aiming to divide, discourage and defeat members.

Maybe they can get a contract passed that way, but they cannot build Teamster power like this. They cannot organize. They cannot defend our pension plans.

The Record

They misled ABF Teamsters and sold management's deal.

They lied to UPS Freight Teamsters and when the members rejected their deal, Hoffa-Hall went into hiding for two months.

It looks like a secret deal with YRC may be in the works, and Hoffa cares more about his hedge-fund pal Harry Wilson than YRC Teamsters.

Worst of all, there is no plan to organize in freight or build Teamster power in trucking.

Teamster power is not just about numbers. It's about a strategy to leverage our power across the supply chain, at ports, plants, rail, trucking, warehousing and distribution, and use that power to grow and diversify our union.

Hoffa wouldn't recognize Teamster power if it stole his golf clubs. We need a new leadership with the vision and commitment to make it happen.

ABF Teamsters: Stand Up

"Teamsters at ABF in Chicago Heights voted overwhelmingly against the proposed contract. We know it will take all of us and many more Teamsters around the country to make sure the vote on supplements addresses the real issues. We're passing out a vote NO leaflet in the Heights but also sending it on to other terminals to build support.

"Somebody needs to stand up for our rights, and that somebody is you!"

Bret Subsits, ABF, Local 710, Chicago

Get to the TDU Convention

"We need to recapture the pride and solidarity that we had in the union when I started out. Freight Teamsters were the backbone of our union and we need to restore that power.

"The TDU convention is a great place to recharge your batteries and get informed and organized for the fights ahead. I'll be in Chicago and encourage all my brothers and sisters to join me."

Larry Capesius, ABF, Local 238, Cedar Rapids, Iowa

August 8, 2013: Reports indicate that YRC executives have asked Hoffa and Freight Director Tyson Johnson for a two-year extension to the present five-year deal, with a wage and pension freeze extending until 2017.  And Hoffa's appointee to YRC's board, Harry Wilson, is trying to broker the deal.

An August 7 press release, following YRC's second-quarter earnings announcement, referred to a potential refinancing of debt arranged by Credit Suisse and the Maeva Group. This announcement was tucked away under the heading "Other."

But Credit Suisse is apparently looking for a longer term deal with the Teamsters before they extend credit.

Maeva's CEO is Harry Wilson, who already has made over $5 million advising YRC, so Hoffa's appointment has been very lucrative for him. And he has millions of more reasons to keep the deals rolling.

Are informal talks being held with YRC about a contract deal? We think if such talks could lead to a proposed contract extension, then members should be informed and consulted. YRC members have sacrificed plenty to keep the company operating—they shouldn’t have to give away all their union rights to secret deals with hedge fund millionaires.

August 5, 2013: The US Court of Appeals for the District of Columbia has upheld all of the new Hours of Service regulations for DOT-regulated trucking operations, except one: the requirement of a 30-minute break during the first eight hours of work for short-haul drivers.

This is of particular note to some UPS package car drivers, who may want to take their lunch break at the end of a shift to escape some measure of forced overtime. The new Hours of Service regs had outlawed this practice, but now the court has restored it.

The new hours of service regulations make three changes: the 34-hour restart can only be used once per week; that 34-hour time off must include at least portions of two nights; and road drivers must take at least a 30-minute rest stop during the first eight hours on duty.

These changes primarily affect nonunion drivers, as few Teamsters are compelled to use the 34-hour restart, and most Teamster road drivers do take a rest or lunch stop.

The latest court ruling ends several years of legal wrangling over the HOS regulations. The American Trucking Associations was the primarily force behind seeking to kill the new regs.

The August 2 court decision is available here.

Arkansas Best Corp. of Fort Smith on Friday reported a profitable second quarter but said it continued to sustain losses in the first six months of the year on rising costs at its largest subsidiary, ABF Freight System Inc.

The publicly traded trucking firm (Nasdaq: ABFS) reported net income of $4.9 million, down 58 percent from the same quarter last year. Earnings per share reached 18 cents, down 59 percent from the same time last year.

Revenue $576.9 million, up 13 percent from $510.5 million during the same time last year.

The company missed analysts' expectations on earnings per share by a penny, but beat revenue predictions by more than $4 million.

But for the first half of the year, costs for salaries, wages and benefits at its LTL subsidiary ABF Freight offset improving revenue. Arkansas Best lost $8.5 million, or 33 cents per share, in the first six months of the year -- a wider loss than the $6.3 million, or 35 cents per share, loss the company reported in the comparable period.

Revenue in the first six months of 2013 reached $1.1 billion, up from $951.4 million during the same period in 2012.

“ABF was profitable during the quarter as it typically is during the second quarter, despite its continued high cost structure,” Arkansas Best CEO Judy McReynolds said. “However, year-to-date losses of $17 million at ABF continue to be unacceptable.”

Arkansas Best has spent much of the year working with the International Brotherhood of Teamsters on a new five-year labor contract for the company's 7,500 union employees. After months of back and forth, the two sides agreed on the National Master Freight Agreement in late June.

The contract includes an immediate 7 percent wage reduction, which the Teamsters said will "be entirely recouped by the fifth year of the five-year contract."

However, there are six supplemental contracts remaining to be ratified by Teamsters employees. Currently, the two sides are operating under a contract extension that ends this month. Ballots were mailed to Teamster employees earlier this week and are scheduled to be counted on Aug. 28.

On Friday, Arkansas Best said the higher labor costs have harmed its profitability. It said that for the first six months of 2013, Arkansas Best Freight's operating loss was $17.1 million compared to $14.2 million in the first half of 2012.

McReynolds said Friday that the deal with the Teamsters is "a milestone."

"Once this important process is concluded, it will represent a pivotal moment for Arkansas Best, as we will be able to turn our undivided attention to driving improved profitability at ABF, while continuing the expansion and growth of our emerging businesses," McReynolds said in a news release. "As our customers look to us for total solutions to their complex supply chain needs, we are now better positioned than at any time in our history to fulfill those requirements."

Recently the company announced internally the formation of ABF Logistics, an operating segment that will house intermodal and global shipping business and supply chain operations. McReynolds said the move allows for "a strategic reallocation of strong sales talent" into ABF Logistics and will allow "us to more effectively unleash the growth potential in each of these service offerings."

"We're exctied about the recent changes," McReynolds said.

Non-asset based operations within the company generated 23-percent of Arkansas Best revenue during the second quarter. All four of those businesses reported increased income.

Freight brokerage led the emerging businesses in revenue gains, with a 63-percent increase. Preventative maintenance saw a nine-percent revenue jump and almost 17-percent operating income boost for emergency and preventative maintenance operations.

"As we turn our undivided attention to restoring ABF's profitability and growing our emerging businesses with the right investment in resources and talent, we are now better positioned than at any time in our history to meet the end-to-end solutions needs of our customers," McReynolds said. "While the U.S. ecomonic outlook remains OK, but not great, we know that serving our customers in even better ways, with the right products and services, is the key to our company's success."

August 6, 2013: The ballots are out in the mail, but active Teamsters in the Central Region and some other supplemental areas are saying Vote No. A leaflet distributed by a number of Teamsters says that "a unified rejection of the supplements will better position us to recover our lost vacation week, and possibly all or some of our lost wages."

Bret Subsits, a Chicago Local 710 driver, has this message for fellow ABF Teamsters: "Somebody needs to stand up for our rights, and that somebody is you!"

In the Central road and cartage supplements, the IBT made only the most minor change imaginable: allowing Teamsters to split the days in a third week of vacation. If you are lucky enough to even have a third vacation week, after you give one up.

This seems to be the best the Hoffa-Hall leadership can do for freight Teamsters. If you think a change in leadership is needed to rebuild Teamster power in trucking, we invite you to Renew your membership or Join TDU today.

Schedule of Voting: August 6, ballots mailed out. August 14, if you do not have a ballot, contact your local union to get one. August 28, vote count.

If you would like to be an observer at the vote count, contact TDU.

The list of the seven supplements rejected is in a bulletin issued by the IBT.

Click here to send us a message.

A federal appeals court in Washington, D.C., today let stand virtually all of the federal government's controversial new rules governing the operations of the nation's truck drivers. The ruling may end the decade-long battle between multiple groups over how fleets and their drivers should ply the nation's roads.

The court, with one exception, upheld the Federal Motor Carrier Safety Administration's (FMCSA) 2011 rules for drivers' hours of service, known in the trade as HOS. The court overturned a FMCSA provision requiring a 30-minute break for short-haul drivers, defined in this instance as local delivery drivers such as those working for companies like FedEx Corp. and UPS Inc.

The ruling is a blow to the American Trucking Associations (ATA), which sued the FMCSA in an effort to overturn the rules. Enforcement of the new rules went into effect July 1, 18 months after the policy was proposed.

In its December 2011 rules, FMCSA reduced a driver's seven-day workweek to 70 hours from 82 hours, a 15-percent cut. For the first time ever, drivers also have limits placed on their traditional 34-hour minimum restart period, requiring it to occur once every seven days and to include two rest periods between 1 am and 5 am over two consecutive days. The 2011 rule bars truckers from driving more than eight hours without first taking at least a 30-minute off-duty break.

In its revisions, the agency left unchanged a key provision allowing 11 hours of continuous drive time after a driver has spent 10 consecutive hours off duty, instead of reducing the number of continuous driving hours to 10. That sparked opposition from safety advocacy groups, notably Public Citizen, which said the language would continue to jeopardize the public on the roads.

THIRD TIME'S A CHARM?
Today's decision marks the third time in 10 years that the appeals court has ruled on the issue of driver hours. At the end of its 22-page decision, the court, perhaps tongue in cheek, said, "the third time's a charm." In an effort to add historical context, the court said its action "brings to an end much of the permanent warfare surrounding the HOS rules."

Still, the court couldn't resist chiding the FMCSA, saying the Department of Transportation's truck safety subagency prevailed "not on the strengths of its rulemaking prowess, but through an artless war of attrition." Those following the battle for years have said the FMCSA has not done a stellar job in the past of defending its position in court.

While the court ruling was not a ringing endorsement of the merits of the FMCSA policy, it found that the agency did not behave "arbitrarily and capriciously" in weighing the merits of the restart provisions. The judges added that FMCSA "acted reasonably, if incrementally, in tailoring the restart to promote driver health and safety."

In its statement, ATA chose to focus on the court's decision denying the rest provision for the local delivery drivers. The group also noted that although the court found various flaws with FMCSA's rationale, it declined to second-guess the agency's methodologies and interpretations and instead deferred to its technical expertise in the issue.

Dave Osiecki, ATA's senior vice president of policy and regulatory affairs, said in the statement that the ruling should "serve as a warning to FMCSA not to rely on similarly unsubstantiated rulemakings in the future."

Osiecki said the evidence presented in the rulemaking process made clear that driver fatigue is a minor factor in the cause of crashes involving a truck. "ATA hopes FMCSA will work with the trucking industry to address more pressing safety and driver behavior issues, including those than can be directly affected through proven traffic enforcement activities aimed at unsafe operating behaviors," he said.

Thomas E. Bray, an HOS expert at J.J. Keller & Associates Inc., a Neenah, Wis.-based consultancy that has been working with carriers to prepare for the changes, said today he was surprised by the decision because of FMCSA's past inabilities to sway the courts. Bray said the court essentially found that the FMCSA finally has enough valid data points to support its policy.

The 2011 rules have become some of the most publicly reviled policy changes in transportation history. Carriers say the rules cut into their productivity and require them to deploy more resources to move the same amount of freight they handle now. Shippers say the new rules have led to a 3- to 5-percent decrease in vehicle miles driven, forcing them to reconfigure their manufacturing and distribution networks if they want to get their goods to market in a timely fashion. Drivers claim the rules curtail their ability to earn a living and force rest upon them when they don't need it.

State regulators worry that carriers will put more trucks on the road to offset the productivity losses, straining their enforcement capabilities. Some in Congress have argued the rule creates a safety hazard by forcing commercial drivers onto the highways at the same time as millions of morning rush-hour commuters.

UPDATED August 1, 2013: The ballots in the second-round vote on the ABF contract go out on August 6, and will be counted on August 28. Teamsters covered by the seven rejected supplements continue to be kept in the dark about what the IBT has done to improve the offer.

We do know that in the Central road and cartage supplements, they made the most minor change imaginable: allowing Teamsters to split the days in a third week of vacation. If you are lucky enough to even have a third vacation week, after you give one up.

This seems to be the best the Hoffa-Hall leadership can do for freight Teamsters. If you think a change in leadership is needed to rebuild Teamster power in trucking, we invite you to Renew your membership or Join TDU today.

Schedule of Voting: August 6, ballots mailed out. August 14, if you do not have a ballot, contact your local union to get one. August 28, vote count.

If you would like to be an observer at the vote count, contact TDU.

The list of the seven supplements rejected is in a bulletin issued by the IBT today.

Click here to send us a message.

TDU is dedicated to providing Teamster members with the information and support they need to make informed decisions about their contracts.

July 24, 2013: The IBT called union officers to Chicago today for a meeting on the ABF contract, but there was no meat on the bones. Absolutely nothing has been negotiated with the company since the rejection the Central Cartage and Road supplements, and it appears that the IBT has little intention of making real changes.

They were more interested in bashing ABF Teamsters for voting No.

IBT negotiator Gordon Sweeton told officers that he will try to get a minor change in the contract, and send it out for a re-vote soon. Or, he will send out a strike vote.

Rather than seeing the rejection in the largest region as leverage to get some adjustment to the contract, the Hoffa administration intends to make token changes and pressure members into accepting it.

ABF Teamsters deserve leadership, not this cowardice. They are going to take a wage cut of about $5,000 per year; the rejection in the Central Region should at least mean some real change in the contract.

The local-by-local vote count is available here.

Click here to send us a message.

TDU is dedicated to providing Teamster members with the information and support they need to make informed decisions about their contracts. No lies, no threats. Renew your membership or Join TDU today.

It is back to the drawing board—or, more accurately, the bargaining table—for UPS and Teamsters negotiators.
 
The company was dealt an historic rebuke when the largest union contract in North America covering 235,000 full- and part-time Teamsters at UPS’s parcel division rejected 18 side agreements known as supplemental agreements. The master parcel contract was passed by a narrow 53-47 margin.
 
The contract was due to expire on July 31. UPS officials had opened bargaining last year in hopes of an early agreement. What they have now is basically half a deal—five-year agreement on $3.90 per hour wage hikes on top of its current $31.34 hourly base rate—but no deal on many supplemental deals covering such thorny issues as health care costs and fringe benefits.
 
UPS officials went out of their way to downplay the importance of the rebuke of the supplemental agreements. John McDevitt, senior vice president of UPS, issued a statement saying it remains “business as usual while UPS and the IBT (Teamsters) resolve remaining issues and Teamster-represented employees ratify new agreements.”
 
That may take a while. The Teamsters members rejected 18 regional and local contract agreements, which all need to be renegotiated, re-voted, and approved by members before the national agreement can go into effect. That means that 63 percent of UPS Teamsters covered by supplements or riders were rejected.
 
Ken Paff, organizer for the dissident Teamsters for a Democratic Union, says the rejection is “a very embarrassing” blow to the union and Ken Hall, its chief negotiator for the parcel division.
 
Although UPS earned $4.5 billion last year, it is calling for increases in out-of-pocket health care costs for UPS workers, who previously enjoyed free dental coverage (now with proposed $1,500 annual limits), low co-pays and no deductibles (now $400 per person) in the rejected supplements.
 
Paff is predicting a “long slog” in the renegotiations. “They are moving at a glacial pace,” Paff told LM. “They’re going to try and wear down, scare down and beat down the members. Who knows when it will end?”
 
Separately, there is also more negotiating work to be done at UPS Freight, the former Overnite LTL company, where the national contract was rejected by a 2-to-1 margin covering 12,000 drivers and dock workers at UPS’s heavy freight division.
 
Those workers were offered wage increases totaling $2.50 an hour – 50 cents an hour rising each of the contract’s five years—but that was rejected soundly. As with the parcel contract, there are controversies over health care coverage, pension and retirement benefits, and other fringes.
 
This was just the second national agreement ever negotiated at UPS Freight, which rebranded Overnite after buying the company for $1.2 billion in 2005. Once mostly a non-union company, Overnite was founded in 1935. It has undergone many changes in the interim, enduring an at-times violent three-year strike from 1999-2001 before remaining mostly non-union under former CEO Leo Suggs.
 
After UPS bought Overnite, it expanded union coverage for nearly all its 12,500 workers. Its first national contract was approved in 2008. That first contract was largely viewed as a “sweetheart” deal between UPS/Overnite and the IBT for card check agreement in return for letting the UPS Teamsters pay $6.1 billion to get out of the underfunded Central States Pension Fund, where UPS faced potentially tens of billions of potential withdrawal liability.
 
But this latest rejection marks the first time a large national transport contract was turned down by a union since the Independent Pilots Association rejected a deal in 1967.
 
As with the parcel contract, the UPS Freight renegotiation is proceeding slowly and out of the public eye.  TDU’s Paff called UPS’s negotiating strategy “the sounds of silence,” referring not just to the media blackout but the company’s behind-the-scenes strategy of apparently waiting out the rank-and-file.
 
Sources within the Teamsters union say they want several issues resolved at UPS Freight, including:
• Banning subcontracting of Teamster work.
• Pension improvements.
• No premiums for health insurance:
• Raises of $1 per hour each year—same as the UPS package workers’ raises.

The UPS parcel contract probably would have been rejected had it not been for large “Yes” majorities in three regions: the Southern, the Atlantic Seaboard, and New England.

The rest of the country, a large majority rejected the deal, including some of the larger and more important UPS facilities.
 
At UPS’s main air hub in Louisville, Ky., where 10,000 workers are employed, Paff said the contract was rejected by an 8-to-1 ratio—even though the company was offering a $1,000 signing bonus to all workers (including part-timers who start at $8.50 an hour).
 
IBT Local 89 in Louisville (whose motto is “A tough union for tough times”), issued strong opposition to the contract extension, calling the action “deplorable” and accused chief negotiatior Hall of a “sell-out” to UPS.
 
“The International Union has essentially given away the members’ right to strike,” the local said in a statement. “This seriously degrades the leverage needed to force UPS to finally agree to a fair contract that addresses the concerns of its workers.
 
“We strongly condemn this move by the IBT/UPS. Ken Hall and the IBT’s sell-out actions are beyond deplorable. Through these actions, Ken Hall and UPS are working to destroy the livelihoods of Teamster workers and their families.
 
“This seriously degrades the leverage needed to force UPS to finally agree to a fair contract that addresses the concerns of its workers,” the local said.
 
At UPS’s main West Coast air hub in Ontario, Calif., the package contract was rejected by a 2-to-1 ratio, according to Paff. In Western Pennsylvania, it went down by a 5-to-1 ratio, he said.
 
“The members are fed up with UPS,” Paff said. TDU is circulating petitions among Teamsters that say: “We’ll Keep Voting No Until UPS Gets it Right.”
 
The big issue for UPS is its health care benefits. Faced with skyrocketing health care costs, UPS is trying to ameliorate those costs by making UPS Teamsters pay more in the form of higher deductibles, higher co-pays and annual limits on coverage. It has not gone down well among the rank and file, who still pay no upfront costs to join UPS’s plan.
 
“Anywhere the health care was changed, the contract was voted down by a large margin,” Paff said.
 
From a company earning more than $4.5 billion in a so-so economy, Paff concluded, “The contract is very mediocre.”