Embroiled in a labor dispute with the Teamsters Union and struggling to repay a $700 million pandemic bailout loan from 2020, it appears Yellow Trucking is teetering on bankruptcy. The ailing company recently filed a civil suit against the Teamster to the tune of $137 million, claiming the union and the 22,000 Yellow workers breached their contract.
The trucking outfit lost a reported $100 million in 2019 and now carries a debt of approximately $1.5 billion, when including the pandemic loan. Like other freight carriers in 2023, high diesel prices and a “soft” less-than-load (LTL) market negatively impacted its revenue streams.
There’s a great deal of Monday quarterbacking going on with respect to Yellow’s Cares Act loan and the Trump Administration’s requirement the federal government receive a 30-percent stake until the money is repaid. Yellow securing the Cares Act bailout was something of an anomaly. The country needed to keep the supply lines open and Yellow, the third-largest LTL organization, provided a niche military supply line service. It delivers meal kits, protective equipment, and other military supplies. Those goods essentially fast-tracked Yellow’s loan approval as a preferred Department of Defense contractor.
Now, officials at Yellow indicate the Teamsters are holding the company back from turning a profit. The outfit recently developed a restructuring plan they say would put black ink in their ledger. The Teamsters have roundly rejected any deal that includes these profit-driving changes, according to Yellow.
“But for the union’s blocking of Yellow’s modernization effort, Yellow would be sitting here today with upwards of an additional $100 million in cash and would be well-positioned to ride out the economic cycle and on track to refinance its Cares Act loan and other upcoming obligations,” company spokeswoman Heather Nauert reportedly said.
Teamsters President Sean O’Brien staunchly disagrees, saying Yellow “wants workers to foot the bill” for years of mismanagement.
Reports indicate Yellow has asked the White House to intervene in the management-union standoff. Those hopes may rest on the fact Pres. Joe Biden bailed out a Teamsters pension plan with $36 million in taxpayer money.
“Knowing of your strong commitment to union jobs, we are formally requesting your assistance in getting Yellow and the Teamsters to the table,” a letter from the trucking company reportedly stated.
Competitor Old Dominion posted a $285 million profit during the first quarter of 2023, while Yellow was in the red.
Sources:
https://www.joc.com/article/yellow-asks-biden-help-bring-teamsters-table_20230630.html
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