The Teamsters say that layoffs and terminal closures appear to be happening at trucking giant Yellow Corp on Friday as the company reportedly prepares for bankruptcy.
Nashville headquartered-Yellow is the nation’s third largest LTL carrier but it appears that the company will not survive ongoing disputes with the International Brotherhood of Teamsters (IBT), a near-miss strike, and years-long cash flow woes, according to Teamsters themselves.
On Friday afternoon, a memo from the IBT sent to local unions representing teamsters working at YRC Freight, Holland, New Penn and Reddaway said that Yellow appears to be winding down some operations. It also instructed Yellow drivers to take their tools and other belongings home with them today.
“…the likelihood that Yellow will survive is increasingly bleak. Yellow continues to clear its system, and it appears to be laying off personnel and closing entire terminals across the country. All Yellow employees should, in our opinion, prepare for the worst, as Yellow appears to be headed to a complete shutdown within the next few days. We recommend that all Yellow employees who have personal belongings and tools at the terminals should take them home today. That way, in case Yellow does shut down over the weekend or next week, the employees’ property will not get lumped in with Yellow’s property and get locked up in a bankruptcy or liquidation proceeding that could result in the employees not recovering their personal property.“
While there is no official word on layoffs directly from Yellow at this time, a report from KELO News says that YRC Freight in Sioux Falls has closed and that 150 workers have been told that Friday is their last day.
The Wall Street Journal confirms that a “large” number of Yellow workers have been laid off but the layoffs do not include freight handlers or union drivers, according to the outlet’s sources.
Yellow employs about 30,000 workers across the U.S.
CDLLife has reached out to Yellow for comment and this article will be updated with any response.
Also on Friday, Yellow announced that it is looking for opportunities to divest 3PL organization Yellow Logistics, Inc.
“Yellow Logistics continues to operate and has the full support of the Yellow organization. We will continue to service our customers, protect our vendors and Yellow Logistics employees,” the company said in a news release.
On July 27, the Wall Street Journal reported that Yellow is preparing to file for bankruptcy. The report also stated that Yellow is losing customers and that a bankruptcy announcement could happen as early as this week.
On Wednesday, a company official told CDLLife that “talks with the International Brotherhood of Teamsters are ongoing. As previously stated, in keeping with the fiduciary responsibility of the company’s executives, the company continues to prepare for a range of contingencies.”
On July 23, the Teamsters announced that Yellow had averted a looming strike by making an agreement with the Central States Pension Fund that afforded the company a 30 day grace period after the company withheld pension and healthcare payments totaling $50 million on July 15.
“Agreement by the Central States at the urging of the Teamsters gives Yellow 30 days to pay its bills with the understanding the company will do so within the next two weeks,” the Teamsters said.
In 2020, Yellow was the recipient of $700 million in COVID-19 relief funding, giving the federal government a 30% stake in the company. Yellow has struggled to repay that loan.
Yellow Transit Freight Lines, the company that would become Yellow, was established in 1924 in Oklahoma City by brothers Cleve and A.J. Harrell.