US Trucking Company Yellow Files for Bankruptcy

Facts

• On Sunday, trucking company Yellow formally filed for Chapter 11 bankruptcy protection after ceasing all operations last month. The company had informed the Teamsters Union of its intention to file for bankruptcy last month.¹
• The 99-year-old firm plans to lay off all of its 30K workers, and has been locked in a dispute with the Teamsters Union that represents 22K of those employees over pension and health insurance contributions. Last month, the company stopped picking up freight from customers.²
• Yellow's debt is believed to be around $1.5B, $729M of which is owed to the federal government in pandemic-era loans. Last month, a congressional probe determined the loans to Yellow opened the government up to a 'significant risk of loss,' as the company insists it will repay all their debt.³
• The company has long faced financial woes, stemming from debt, botched mergers, and labor disputes. The company's cash holdings had declined to $100M in June, down from December's $235M as an industry-wide decline in shipping demand took its toll on the firm.⁴
• Recent moves to integrate shipping networks acquired in mergers triggered a back-and-forth with the Teamsters over contract renegotiation. Potential strike action drove away business, as Yellow sought a 30-day reprieve to pay a $50M backlog in pension and benefit contributions.⁴
• In a statement, Yellow CEO Darren Hawkins accused the Teamsters of 'driving our company out of business,' while Teamsters boss called the company 'greedy' and accused it of squandering the government loan. The company plans to sell off its assets to pay their over 100K creditors.⁵

Sources: ¹Reuters, ²CNN, ³ABC News, ⁴Wall Street Journal and ⁵New York Times.

Narratives

• Right narrative, as provided by FOX News. The collapse of a vital player in America's trucking world came at the hands of an unreasonable union making unrealistic demands. The company has long needed to restructure its inefficient operations but was stymied at every step of the way by the Teamsters, with the threat of a strike driving away customers. Amid an industry-wide downturn, the union has shot itself in the foot by forcing tens of thousands out of the job with their pension and benefit demands, without realizing that everyone in the trucking world is struggling.
• Left narrative, as provided by Land Line. Instead of pointing the finger at the unions looking out for the workers, we should be looking at the profound mismanagement that has gripped Yellow for years. Not even a nearly billion-dollar handout from the government could stave off their collapse, which Congress says should never have been given to the company in the first place. Once again, a company that rode high on the taxpayer's dime is now crying poverty when the time comes to properly compensate workers.