Yellow Corp. to cease operations, file bankruptcy
Yellow Corp. is ceasing operations and filing for bankruptcy, according to the International Brotherhood of Teamsters.
On Monday, July 31, the Teamsters announced in a news release that Yellow will be ceasing operations and filing for bankruptcy.
“Today’s news is unfortunate but not surprising,” Teamsters General President Sean M. O’Brien said in a statement. “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. This is a sad day for workers and the American freight industry.”
The move by Yellow will put tens of thousands of employees out of work, including about 22,000 union members. As of publication, no other details of the bankruptcy were known. Yellow could not be immediately reached for comment.
The news comes about a week after Yellow avoided a Teamsters strike.
On July 23, the International Brotherhood of Teamsters announced that a potential strike with Yellow employees had been averted. The Teamsters had threatened to strike on July 24, if the company had not rectified delinquent health and welfare and pension contributions.
According to a news release, the Central States Health and Welfare Fund agreed to extend health care benefits for Yellow employees working under YRC Freight and Holland. Had the extension not been granted, benefit suspensions would have gone into effect July 23.
“Our members at YRC Freight and Holland cannot work without health care, and the Teamsters worked tirelessly to ensure an immediate strike at Yellow could be averted,” O’Brien said in a statement. “These discussions were not easy, but Central States has made meaningful movement under pressure from the union. We are seeking a real resolution, but let this solution today serve as a profound reminder that our members can only endure so many sacrifices. Teamsters at Yellow simply work too hard and have already given so much.”
On July 21, the U.S. District Court for the District of Kansas ruled against Yellow, denying the company’s request for an injunction to stop the Teamsters from striking over the delinquent benefit contributions. At the time, O’Brien threatened to strike if the problem was not resolved.
Yellow issued the following statement regarding the court ruling:
“The court, recognizing a strike would likely kill the company, resulting in the loss of 30,000 jobs, cautioned the union – that while it won today’s battle, it could very well lose the war.
The company will continue to pursue its breach of contract case where it seeks to recover more than $1.5 billion in lost enterprise value caused by the International Brotherhood of Teamsters.” LL
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