Trucking giant Yellow Corp. declares bankruptcy
Trucking giant Yellow Corp. announced Sunday it declared bankruptcy and will shut down following years of financial challenges and growing debt.
Yellow Corp. filed for Chapter 11 relief in the U.S. Bankruptcy Court for the District of Delaware on Sunday, according to court records.
“It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business,” Yellow Corp. CEO Darren Hawkins wrote in a statement Sunday night. “Today, it is not common for someone to work at one company for 20, 30, or even 30 years, yet many at Yellow did.”
The trucking company racked up around $1.5 billion in debt as of late March after having received $700 million in pandemic-era loans from the federal government in 2020 on national security grounds, according to The Associated Press. The company will liquidate, as it is unlikely to recover the funds it received.
As of June 30, the company said it has paid $67 million in cash interest on the loan, which is due in 2024. A congressional probe last month found the Treasury and Defense departments “made missteps” in the granting of the loan.
The news does not come as a surprise to some workers, after the Teamsters union announced last week it received a legal notice that Yellow Corp. would cease operations and file for bankruptcy.
Yellow Corp., formerly known as YRC Worldwide Inc., is one of the nation’s largest less-than-truckload carriers, and employs roughly 30,000 across the country, according to the company’s website.
The Teamsters union and Yellow Corp. avoided a strike last month following nine months of contract talks after a pension fund agreed to extend health benefits for workers of two Yellow Corp. operating companies. It gave the trucking company “30 days to pay its bills,” which equal $50 million owed to the Central States Health and Welfare Fund.
In a statement Sunday, Yellow Corp. claimed that the International Brotherhood of Teamsters (IBT) drove the company out of business.
“We faced nine months of union intransigence, bullying and deliberately destructive tactics. A company has the right to manage its own operations, but as we have experienced IBT leadership was able to halt our business plan, literally driving our company out of business, despite every effort to work with them.”
The Teamsters president pushed back on that characterization.
“Yellow management and the financiers who pull the strings continue to blame union contracts for their demise,” Teamsters General President Sean M. O’Brien said. “The fact is, Teamster-represented companies like ABF and TForce Freight are not only able to fairly compensate workers, they are also wildly profitable.”
O’Brien said members of Teamsters gave up earnings and pension securities “to salvage Yellow from its corporate struggles.”
“Teamster families sacrificed billions of dollars in wages, benefits, and retirement security to rescue Yellow. The company blew through a $700 million government bailout. But Yellow’s dysfunctional, greedy C-suite failed to take responsibility for squandering all that cash. They still don’t,” O’Brien said. “They shamelessly pin their corporate incompetence on working people.”
The Associated Press contributed. Updated at 1:02 p.m.
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