July 28, 2023

Yellow Bankruptcy

  • Yellow trucking is looking like it will file for bankruptcy Monday.
  • YRC Freight is the main subsidiary of Yellow.
  • Canadian branding: YRC Freight Canada
  • Two Unifor units affected: Local 4209
  • Teamsters have 22K-30K members in Yellow and some members in Canada: Teamsters Local 91. For YRC Reimer.
  • Yellow announced this morning that it was selling the logistics arm of its company. Before it officially files for bankruptcy.
  • Layoffs at corporate head offices and chains on gates
  • Company has asked delivery drivers not to bother to pick up invoice cheques from shippers.

Yellow was burning $10M a day and only had $100M in cash as of last week.

Yellow looks completely insolvent at this point. Unless it can find financing or limp along and become solvent by selling its profitable logistics arm, it is not liquid.

Since it has issued layoff notices, bankruptcy or not it will be a changed company next week.

The Teamsters have asked the USA government to intervene in the bankruptcy because it involves the Teamsters pension and benefits fund. Meaning it could be quite messy.

The issues driving the bankruptcy are:

  • $700m paid to the company as a loan "accidentally" under the covid supports from USA government.
  • Teamsters ongoing negotiations, issues of violations of CA wage provisions, and threat of strike.
  • The company waffled on payments to the pensions and benefits funds.
  • A court rejected Yellow's calls for judicial intervention against the strike threatened by the Teamsters.
  • The strike threat and public waffling affected contract deals with Yellow putting them even closer to insolvency.
  • Yellow tried to get around this by delaying payments to the pension fund.
  • Teamsters won the court battle forcing Yellow to pay into the pension fund.
  • Bankruptcy process was initiated immediately after this.

This is happening in the context of many bankruptcies and closing of trucking transport companies in the USA with the decline of transport services needed this year compared to 2021-2022. The fluctuations of demand for transport services has left many companies in the USA wrong footed this summer.

Other Less-Than-Truckload companies represented by Unifor