US trucking giant Yellow shutting down operations amid standoff with Teamsters union
The company had been plagued by financial struggles for more than a decade
Danger of Yellow trucking company going bankrupt is 'imminent': Lawyer Marc Kasowitz
Kasowitz Benson Torres’ Marc Kasowitz details the ongoing legal battle between Yellow and the Teamsters Union on ‘The Claman Countdown.’
After nearly 100 years in operation, U.S. trucking giant Yellow Corp is shutting down operations.
The company sent notices to customers and employers, according to a report from The Wall Street Journal.
The end of the road comes after the company earlier this month averted a strike by some 22,000 Teamsters-represented workers, saying the company will pay the more than $50 million it owed in worker benefits and pension accruals.
Then on Thursday, the company said it was exploring opportunities to divest its third-party logistics company Yellow Logistics Inc, and was engaged with multiple interested parties.
COST ASSOCIATED WITH NORFOLK SOUTHERN'S OHIO DERAILMENT MORE THAN DOUBLES TO $803 MILLION
Yellow Corp. trailers are pictured at a YRC Freight facility Friday, July 28, 2023, in Richfield, Ohio. (AP Photo/Sue Ogrocki / AP Images)
Formerly known as YRC Worldwide Inc., Yellow was one of the nation's largest less-than-truckload carriers with some 30,000 employees across the country.
The shutdown comes after more than a decade of financial struggles and seeing customers leave in droves.
FreightWaves reported last week that employees were told to expect the filing Monday. Yellow laid off an unknown number of employees Friday, the outlet later reported, citing a memo that stated the company was "shutting down its regular operations."
According to Satish Jindel, president of transportation and logistics firm SJ Consulting, Yellow handled an average of 49,000 shipments per day in 2022. Last, that number was down to between 10,000 and 15,000 daily shipments.
As of late March, Yellow had an outstanding debt of about $1.5 billion. Of that, $729.2 million was owed to the federal government.
The end of the road for Yellow comes after the company earlier this month averted a strike by some 22,000 Teamsters-represented workers, saying the company will pay the more than $50 million it owed in worker benefits and pension accruals. (Fox News)
In 2020, under the Trump administration, the Treasury Department granted the company a $700 million pandemic-era loan on national security grounds. Last month, a congressional probe concluded that the Treasury and Defense Departments "made missteps" in this decision — and noted that Yellow's "precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss."
The government loan is due in September 2024. As of March, Yellow had made $54.8 million in interest payments and repaid just $230 million of the principal owed, according to government documents.
Meanwhile, a series of heated exchanges had been building up between the Teamsters and Yellow, who sued the union in June after alleging it was "unjustifiably blocking" restructuring plans needed for the company's survival.
The Teamsters called the litigation "baseless" – with general president Sean O'Brien pointing to Yellow's "decades of gross mismanagement," which included exhausting the $700 million federal loan.
CLICK HERE TO GET THE FOX BUSINESS APP
FOX Business has reached out to representatives for Yellow and the Teamsters for comment.
The Associated Press contributed to this report.