Jack Cooper Transport is expected to make a $2 billion offer to onboard the now-defunct Yellow Trucking. The Georgia-based trucking outfit has reportedly been rallying support in Washington, D.C., and sources such as Reuters indicate the White House has shown “interest” in a potential deal. Reports are also swirling that Jack Cooper would essentially keep the foundation of Yellow intact and rescue the jobs of 30,000 union workers.
One caveat appears to be that officials from Jack Cooper are looking for government-backed loan extensions and support to jumpstart the bankrupt freight carrier. Sarah Riggs Amico and her father, T. Michael Riggs, are the critical decision-makers at Jack Cooper. Amico, who attended Harvard Business School, unsuccessfully ran for a U.S. Senate seat in Georgia.
The notion of restoring 30,000 union positions, versus Yellow’s liquidation, has some politicians supporting an effort to extend Yellow’s debt should Jack Cooper take over.
“If this loan were to go through bankruptcy, $700 million worth of taxpayer dollars would be essentially wasted,” Sen. Roger Marshall reportedly wrote to the Treasury. The purchase “would provide an ample opportunity to have this loan repaid and the taxpayers made whole again.”
Yellow had recently started to turn a profit, generating upwards of $5 billion in revenue while making 50,000 daily deliveries. Ohio Sen. Sherrod Brown also reportedly penned a letter, asking Treasury Sec. Janet Yellen to back the play.
“At the end of the day, there are thousands of American families that want to see the company’s doors reopen,” Sen. Brown reportedly wrote. “Treasury needs to be clear-eyed that union families and the strength of our economy rely on jobs like the ones that were lost.”
The 99-year-old Yellow Corp accounted for upwards of 10 percent of the truck transportation market. It carried $2.59 billion in debt against $2.15 billion in assets when it shuttered. Yellow officials have complained that labor disputes with the Teamsters union led to its demise. Some industry insiders point to acquisitions that didn’t pan out and gross mismanagement.
Until the 95-year-old Jack Cooper organization makes an official offer, Estes Express appears to have made the highest bid. Estes submitted a proposal of $1.525 billion — in cash— for assets such as Yellow’s terminals. Old Dominion Freight Line’s offer of $1.5 billion is reportedly the next highest. Yellow possesses approximately 12,000 trucks, 35,000 trailers and employed 22,000 truckers at the time of the fateful closing.
Sources:
https://www.ttnews.com/articles/jack-cooper-bid-yellow
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