by Will Kessler
Trucking company Yellow filed for Chapter 11 bankruptcy on Sunday after receiving more than $700 million in COVID-19 pandemic program loans from the federal government, according to a press release from Yellow.
The 99-year-old company ceased operations of its more than 12,000 trucks on July 30, ending its less-than-truckload business, a shipping service that does not require a whole truck to be filled and was utilized by companies like Walmart, Amazon and small businesses that did not have enough freight to ship in a full truck. The bankruptcy follows a history of financial trouble, with the company receiving $729.2 million in pandemic-era loans from the Trump administration in 2020, and had a total debt of $1.5 billion, according to The Associated Press.
“It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business,” Yellow’s CEO Darren Hawkins said in a press release. “Today, it is not common for someone to work at one company for 20, 30, or even 40 years, yet many at Yellow did. For generations, Yellow provided hundreds of thousands of Americans with solid, good-paying jobs and fulfilling careers.”
Yellow will be liquidating as a result of the bankruptcy, and the U.S. is unlikely to recover the funds loaned to the company, according to the AP.
A congressional probe into the loan found that the Treasury and Defense departments made missteps in the decision to grant the loan due to Yellow’s poor financial situation and the high risk that the company would not be able to pay the loan back, according to the AP.
“All workers and employers should take note of our experience with the International Brotherhood of Teamsters (“IBT”) and worry,” Hawkins said in the press release about the reason the company was forced to close, blaming Teamsters workers’ demands. “We faced nine months of union intransigence, bullying and deliberately destructive tactics. A company has the right to manage its own operations, but as we have experienced, IBT leadership was able to halt our business plan, literally driving our company out of business, despite every effort to work with them.”
Around 22,000 of the 30,000 Yellow employees were members of the Teamsters. The two have been in a nine-month heated exchange over worker benefits and compensation, with the union threatening to strike in July.
“Today’s news is unfortunate but not surprising. Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” Teamsters General President Sean O’Brien said in a press release following the announcement of the end of operations for Yellow. “This is a sad day for workers and the American freight industry.”
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Will Kessler is a reporter at Daily Caller News Foundation.
Photo “Yellow Trucking” by Yellow Corp.
