Yellow Corp., Union Teamsters Clash, Operations Stopped and Thousands Jobless

Yellow Corp. a 99-year-old trucking company, once dominated the industry, halted operations Sunday and will lay off about 30,000 workers.

Yellow Corp., which once dominated the industry and is a 99-year-old trucking company, halted operations Sunday and will lay off all 30,000 workers.

Union Demanded Healthcare Be Paid

Yellow Corp., a unionized company, has been battling with the Teamsters Union, representing about 22,000 drivers and dock workers.

Just a week ago, the union canceled a threatened strike that had been prompted by the company ‘failing to contribute to its pension and health insurance plans.’ The union granted the company an extra month to make the required payments.

A breaking point occurred on July 15 when Yellow missed contractually required payments to Central States Funds, a multiemployer fund manager overseeing its health, welfare, and pension benefits.

The debt-heavy, cash-strapped company had previously asked to defer the payments with interest, but that request was denied by the Central States even though similar requests had been granted in the past. 

After weeks of customers and brokers pulling freight from its network over concerns it would ultimately be forced to close, time ran out on the clock before it could hatch out a contract with the union, which in turn was expected to produce a lifeline from its lenders.

The Teamsters Union said it was notified Sunday that Yellow Corp. would be filing for bankruptcy and ceasing operations.

The Kansas-based company’s declining financial outlook, plus an ongoing battle with unions suggested that bankruptcy is inevitable, and an announcement could come today.

But Wait, There’s More

What many news outlets fail to point out is that Yellow was in the process of suing IBT for $131M in damages because they would not cooperate.

The complaint alleges that the defendants breached their binding union contract with Yellow causing more than $137 million in damages by unjustifiably blocking, for over eight months, Yellow’s restructuring plan to modernize its business, which is necessary to compete against non-union carriers that dominate the LTL business today. These modernization efforts, known as One Yellow, are essential to the Company’s survival. Without these crucial reforms, which are standard practice in the industry today, Yellow likely will not survive, 30,000 jobs will be lost, including 22,000 union jobs, and its shareholders, including the federal government, which owns 30.1% of Yellow stock, will be severely damaged.

“We do not take this action lightly, but the Union’s leadership has left us with no choice,” said Yellow Corporation management. “For many months, we have made good faith efforts to meet with the IBT to propose a path forward that works for all parties, but they refuse even to meet, let alone engage in honest talks. We have communicated with all stakeholders in Washington, D.C., including the Biden Administration, to apprise it of the imminent loss of tens of thousands of jobs, the significant anti-competitive effects on the American economy and the devastating impact to the supply chain, and to seek their assistance in persuading the IBT to negotiate a mutually acceptable agreement. We are fighting for the livelihood of our 30,000 employees who are good hard-working people. We will do all we can to save these American jobs and to protect our shareholders, including the American taxpayer.”

See ‘news release’

The complaint also alleges that Sean O’Brien, IBT General President, orchestrated these breaches and has prevented Yellow from meeting with IBT leadership. For several years, the IBT had endorsed the company’s modernization effort and approved the first of the effort’s three phases before the IBT reversed itself, taking, in Mr. O’Brien’s words, a “militant approach” to blocking Yellow’s modernization.

Sean O’Brien has taken up the role of public agitator for the company’s demise, recently tweeting an image of a headstone in a cemetery with “Yellow” on it.

Yellow Forced To Shut Down Operations, Employees Lose Jobs

A company fence sign asks union members to contact their representatives, at the North Lima branch of Yellow Corp. in Richfield, Ohio ceased operations as of 12 p.m. Sunday.

A leaked internal memo that was sent to managers instructed them to have any workers at their facilities “clock out and vacate the premises” at 11:30 a.m. Sunday, to lock the gates by noon and upload photos of the secured gates by 12:30 p.m.

On Friday, Yellow laid off most of its nonunion employees in areas like customer service, information technology and sales. The company stopped making pickups earlier in the week and has been delivering the remaining freight in its network ahead of what appears to be a permanent closure. 

Yellow, the third-largest trucking company in the U.S., had an outstanding debt of about $1.5 billion as of March. 

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One thought on “Yellow Corp., Union Teamsters Clash, Operations Stopped and Thousands Jobless”
  1. When unions first started they were good. Now they are killing companies with their higher demands. Oh well, theres 30,000 without a job.

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