The ubiquitous Yellow Corp trucks, the largest mover of America’s freight, will roll no more as the company has filed for bankruptcy protection. The news is good for its smaller competitors, but bad for consumers as the dominant hauler hits the road.
Worse still, U.S. taxpayers will also be on the hook since the 100-year-old company owes the treasury $700 million for a 2020 COVID relief loan. Payments to the government and the company’s creditors depends on its ability to unload its nationwide properties and about 12,000 trucks. Taxpayers are also getting the short end of the stick as the government holds 15.9 million company shares taken as security for the pandemic loan. Yellow shares traded as high as $6 in 2020 and have cratered to around $1.70.
Yellow blamed the bankruptcy, the largest-ever for a U.S. trucking concern, on the International Brotherhood of Teamsters, the union that represents about 22,000 of its employees. Teamsters leadership "was able to halt our business plan, literally driving our company out of business," CEO Darren Hawkins said. The union blamed company executives: "Yellow's dysfunctional, greedy C-suite failed to take responsibility for squandering all that cash. They still don't," said Teamsters General President Sean O'Brien. "They shamelessly pin their corporate incompetence on working people." Financial analysts pegged the company's failure to acquisition-related debt, high operating costs in the Biden economy and declining shipping rates.
 |
| tdu.org |
The freight mover recently averted a strike by the Teamsters after agreeing to pay more than $50 million it owed for worker benefits and pension accruals. The company's business evaporated in the days leading up to the agreement. Adding insult to injury, its employees filed lawsuits charging the company with failing to give them the required 60-day notice before letting them go.