Will the unions ever learn? YRC Worldwide (NYSE:YRCW) investors are riding a nauseating roller coaster this week as management and the union debate a pension obligation. If a deal is not reached, the trucking company’s next stop may be at a bankruptcy court.

When are the detrimental effects of a nasty recession too much for a company that has done everything right too much to overcome? That is the question YRC Worldwide (NYSE:YRCW) investors are asking these days.

Just a couple of months ago, when the media was abuzz with sightings of economic “green shoots,” the trucking company’s investors were riding a rocket to the top, celebrating as a strong management team helped shares cross the $2 level, then $3, then $5, even $6.

But now that the nation’s trucking demand is far from revved up, investors are realizing YRC’s troubles are not over yet. During the last week, they were forced to endure the pain of seeing their shares drop all the way to a new 52-week low of a paltry $0.89.

The latest pain comes from my arch nemesis… union labor.

In YRC’s case, the Teamsters are maintaining their infamous negotiating might and bargaining themselves right out of a job.

With revenues plunging and fuel costs remaining stubbornly high, the last thing any trucking company needs to do is worry about expensive pension contributions. In YRC’s case, it is forced to pay for employees that never even worked for the company thanks to a regional pooled pension plan. (That’s unions for you).

I will give the Teamsters credit, however. Earlier this year the union agreed to a ten percent pay cut for its employees in exchange for a 15% stake in the company. Unfortunately, that stake is now worth a fifth of what it was in January.

Did they learn?

After getting hit with that punch, it is easy to see why the union showed up at the bargaining table this month with less willingness to compromise.

Earlier this week, the two sides of the contract were so far apart on the company’s plans to defer pension payments that one analyst boldly stated he believes a bankruptcy filing is all but certain.

The less-than-optimistic announcement sent shares plunging by 45% in just two days.

Then came yesterday’s announcement that the Teamsters had reached a tentative agreement (which remains undisclosed). The news sent shares soaring by triple-digit proportions.

Today, the jubilation is dwindling as shares are down by about 10% on the day’s lows.

With any luck, YRC shareholders will become re-familiarized with the bulls next week when union members learn the details of the agreement and prepare to take a vote.

If the deal is signed, YRC will get a major reprieve. It will likely be able to push back major pension obligations for over a year, saving the company half a billion dollars of desperately needed cash.

Investors should look at the company as a high-risk, speculative play, but the rewards could be phenomenal for folks willing to hold onto shares for six months to a year.

The threat of bankruptcy is still out there, but appears far smaller today than it did just 72 hours ago. As the situation improves, so will share price.

Source: YRC Worldwide: Jimmy Hoffa Would Be Proud