A truck bearing the Yellow brand travels in winter weather on Interstate 80, east of Omaha, Neb.
(AP Photo/Nati Harnik)
Sun, July 23, 2023
July 23 (Reuters) - U.S. trucking firm Yellow averted a threatened strike by 22,000 Teamsters-represented workers on Sunday, saying the company will pay the more than $50 million it owed in worker benefits and pension accruals.
"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," Teamsters union said on Sunday.
Yellow is the third-biggest U.S. trucking company specializing in the less-than-truckload segment that combines shipments from different customers in the same trailer.
Its customers include large retailers like Walmart and Home Depot, manufacturers and Uber Freight, some of which have paused cargo shipments to the company for fear those goods could be lost or stranded if the carrier goes bankrupt.
Competitors, who are grappling with a sharp drop in freight volume, are expected to cherry-pick the company's customers, trucking experts and analysts said.
In 2020, then-U.S. President Donald Trump bailed out the company with a $700 million pandemic relief loan. In exchange, the federal government took a 30% stake in Yellow.
The Nashville, Tennessee-based company formerly called YRC Worldwide has not significantly repaid that loan, which is part of $1.2 billion in debt it is scrambling to refinance before it comes due next year. Yellow's other lenders include a group led by Apollo Global Management.
Company executives appealed to the International Brotherhood of Teamsters for help slashing expenses as cash dwindles. It has successfully won such concessions in the past, but this time was rebuffed by new Teamsters General President Sean O'Brien.
"Following years of worker give backs, federal loans, and other bail outs, this deadbeat company has only itself to blame for being in this embarrassing position," O'Brien said in a statement last week.
O’Brien is also leading negotiations covering roughly 340,000 U.S. employees at United Parcel Service.
A federal judge in Kansas on Friday rejected Yellow's request to block the Teamsters from striking over the delinquent benefit payments.
(Reporting by Lisa Baertlein in Los Angeles and Ananta Agarwal and Mrinmay Dey in Bengaluru; editing by Diane Craft and Chris Reese)
Company executives appealed to the International Brotherhood of Teamsters for help slashing expenses as cash dwindles. It has successfully won such concessions in the past, but this time was rebuffed by new Teamsters General President Sean O'Brien.
"Following years of worker give backs, federal loans, and other bail outs, this deadbeat company has only itself to blame for being in this embarrassing position," O'Brien said in a statement last week.
O’Brien is also leading negotiations covering roughly 340,000 U.S. employees at United Parcel Service.
A federal judge in Kansas on Friday rejected Yellow's request to block the Teamsters from striking over the delinquent benefit payments.
(Reporting by Lisa Baertlein in Los Angeles and Ananta Agarwal and Mrinmay Dey in Bengaluru; editing by Diane Craft and Chris Reese)
No strike at Yellow; Central States grants extension
Todd Maiden
Sun, July 23, 2023
The fate of Yellow still hangs in the balance after shippers have been diverting freight from its network in recent weeks. (Photo: Jim Allen/FreightWaves)
Teamsters at less-than-truckload carrier Yellow Corp. will not be on strike Monday as previously planned. Central States Funds agreed Sunday to extend health care benefits for employees at YRC Freight and Holland.
Yellow (NASDAQ: YELL) now has 30 days to pay $50 million to catch up on its benefits payments. A statement from the Teamsters said it expects the company to make the payments within the next two weeks.
“The intense discussions between Teamsters leadership and Central States successfully convinced fund trustees to reverse their previous decision that health care benefits would end on July 23 if Yellow remained delinquent,” the statement read.
It appears Yellow and the Teamsters are headed back to the table.
The union’s negotiating committee will meet with Yellow representatives Sunday night in Washington, D.C. “to review the state of the company and the current contract.”
“As the Teamsters and Yellow sit down, the reversal by Central States will keep health care benefits paid and hardworking Teamsters on the job for the time being,” the release said.
In recent months, the two parties failed to reach an agreement over a proposed change of operations that the carrier said was the key to its survival. Through the process, Yellow has been losing market share as shippers and 3PLs steer freight away from the company concerned over its ability to keep its doors open.
The breaking point came last weekend when Yellow missed contractually required benefits payments to Central States Funds. The debt-heavy, cash-strapped company previously asked to defer the payments with interest, to no avail even though Central States had granted such requests in the past.
The company lost a hearing in a federal court on Friday, which would have barred the Teamsters from a work stoppage. Up until the last-minute extension on Sunday, Teamsters at YRC Freight and Holland were preparing to strike over the missed payments, which would have left them without health insurance.
No mention was made about missed contributions to the pension fund. Yellow’s participation in that fund was expected to be terminated on Sunday.
“Your Honor, the situation here for Yellow and the stakeholders is binary,” said Yellow’s attorney Marc Kasowitz in court on Friday. “If there’s a strike, the company is gone. If a strike is at least temporarily enjoined … then there’s some possibility for the company to survive.”
It’s still unclear where the company stands with contributions to its second- and third-largest funds. A July 13 letter from Yellow CEO Darren Hawkins to Teamsters General President Sean O’Brien said the company wouldn’t be able to make those upcoming payments either.
“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 the Sunday 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.”
A request for comment from Yellow was not made by the time of this publication.
Todd Maiden
Sun, July 23, 2023
The fate of Yellow still hangs in the balance after shippers have been diverting freight from its network in recent weeks. (Photo: Jim Allen/FreightWaves)
Teamsters at less-than-truckload carrier Yellow Corp. will not be on strike Monday as previously planned. Central States Funds agreed Sunday to extend health care benefits for employees at YRC Freight and Holland.
Yellow (NASDAQ: YELL) now has 30 days to pay $50 million to catch up on its benefits payments. A statement from the Teamsters said it expects the company to make the payments within the next two weeks.
“The intense discussions between Teamsters leadership and Central States successfully convinced fund trustees to reverse their previous decision that health care benefits would end on July 23 if Yellow remained delinquent,” the statement read.
It appears Yellow and the Teamsters are headed back to the table.
The union’s negotiating committee will meet with Yellow representatives Sunday night in Washington, D.C. “to review the state of the company and the current contract.”
“As the Teamsters and Yellow sit down, the reversal by Central States will keep health care benefits paid and hardworking Teamsters on the job for the time being,” the release said.
In recent months, the two parties failed to reach an agreement over a proposed change of operations that the carrier said was the key to its survival. Through the process, Yellow has been losing market share as shippers and 3PLs steer freight away from the company concerned over its ability to keep its doors open.
The breaking point came last weekend when Yellow missed contractually required benefits payments to Central States Funds. The debt-heavy, cash-strapped company previously asked to defer the payments with interest, to no avail even though Central States had granted such requests in the past.
The company lost a hearing in a federal court on Friday, which would have barred the Teamsters from a work stoppage. Up until the last-minute extension on Sunday, Teamsters at YRC Freight and Holland were preparing to strike over the missed payments, which would have left them without health insurance.
No mention was made about missed contributions to the pension fund. Yellow’s participation in that fund was expected to be terminated on Sunday.
“Your Honor, the situation here for Yellow and the stakeholders is binary,” said Yellow’s attorney Marc Kasowitz in court on Friday. “If there’s a strike, the company is gone. If a strike is at least temporarily enjoined … then there’s some possibility for the company to survive.”
It’s still unclear where the company stands with contributions to its second- and third-largest funds. A July 13 letter from Yellow CEO Darren Hawkins to Teamsters General President Sean O’Brien said the company wouldn’t be able to make those upcoming payments either.
“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 the Sunday 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.”
A request for comment from Yellow was not made by the time of this publication.
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