Yellow Trucking has filed for chapter 11 bankruptcy and will wind down its operations in the coming months, the company announced Monday.
Yellow, a nearly 100-year-old company, was struggling to remain afloat amid mounting debt and a bitter struggle with unionized workers. Its bankruptcy filing in a Delaware court estimated assets and liabilities of up to $10 billion.
The filing comes years after former President Trump’s administration gave the company a $700 million bailout in an effort to save it and its roughly 30,000 workers. The company says it still plans to fully repay that bailout.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| YELL | YELLOW CORP. | 2.36 | -1.21 | -33.89% |
Despite the promise, Yellow has some 100,000 creditors, and it will face $1.3 billion in debt payments coming due in 2024.
US TRUCKING GIANT YELLOW SHUTTING DOWN OPERATIONS AMID STANDOFF WITH TEAMSTERS UNION
Yellow, formerly known as YRC Worldwide Inc., has struggled with financial woes for several years. The company’s acquisitions of other carriers over the past few decades grew it to become the fifth-largest trucking firm in the nation and the third-largest less-than-truckload carrier. However, the low-cost carrier struggled with its debt load.
UPS-TEAMSTERS DEAL THREATENS TO KEEP INFLATION ELEVATED
Yellow CEO Darren Hawkins attempted to reduce that redundancy through a restructuring initiative dubbed “One Yellow.” The Teamsters union – which represents 22,000 of Yellow’s 30,000 employees – agreed to the first phase of the plan but did not agree to the second phase, which the trucking titan insisted was needed for its survival.
Yellow sued the Teamsters in June, alleging the labor organization was “unjustifiably blocking” its modernization plans. Then in July, the company notified the Central States Welfare and Pension funds that it would not be making its $50 million required payment, leading the Teamsters to threaten to strike.
As a result, Yellow customers fled amid the strike threat, accelerating the cash-strapped company’s death spiral and wiping out shareholders.
The Teamsters union said the company’s demise was of its own making. The union announced last week that it was notified Yellow was ceasing operations and filing for bankruptcy.
Fox Business’ Breck Dumas and Reuters contributed to this report.
Read the full article here
