After putting up a fight, the 99-year-old trucking company, Yellow, has begun preparing for bankruptcy. Paul Page reports for The Wall Street Journal:
Trucking company Yellow on Friday laid off a large number of workers and is shutting down regular operations, according to people familiar with the actions, as the company copes with a liquidity crisis and weighs options including an imminent bankruptcy filing.
The company, one of the country’s largest trucking companies with more than $5.2 billion in revenue last year, is keeping its customer service workers in place, according to one of the people, because the trucker still has freight in its network that it is trying to get to destinations or back to customers.
Yellow said in a notice to employees that was obtained by The Wall Street Journal that it “is shutting down its regular operations on July 28, 2023, closing and/or laying off employees at all of its locations.”
The actions came as Yellow has been locked in a battle with the International Brotherhood of Teamsters over missed pension and benefits payments and new contract terms. The showdown, including a strike threat over the pension-fund payment, accelerated a financial tailspin at a business already facing a heavy debt load and dimming demand in a weak freight market.
The Wall Street Journal reported Yellow was preparing to file for bankruptcy, heightening the threat that the 99-year-old trucker would shut down.
Sarah Nassauer and Page report elsewhere in The Wall Street Journal:
A failure imperils nearly 30,000 jobs, including around 22,000 Teamsters members. Hundreds of its nonunion employees were laid off Friday after the company stopped taking in new shipments from customers.
It would be the biggest collapse in terms of revenue and jobs for the fickle U.S. trucking industry, though customers say disruptions should be limited. Many shifted their cargoes to rivals in recent weeks, hastening Yellow’s demise. Competitors said their volumes jumped last week.
“Teamsters have kept this company afloat for more than a decade through billions of dollars in wage, pension and work-rule concessions,” a union spokesman said. “Yellow couldn’t manage itself, and it wasn’t up to Teamsters to do it for them.”
Since 2021 Yellow has pursued a cost-cutting and integration plan that executives said would improve the business. A spokeswoman for Yellow said it hasn’t asked the union for concessions in its recent restructuring. “Yellow offered to pay its employees more,” she said. The union “refused to negotiate for nine months.”