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Yellow, a trucking company that has been around for 99 years, will be filing for bankruptcy — costing up to 30,000 jobs, according to the company’s union.
The trucking company, which was founded in 1924 in Oklahoma, has struggled with debt in recent years, taking about $700 million in loans from the federal government during the COVID pandemic.
“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. This is a sad day for workers and the American freight industry,” said Teamsters General President Sean M. O’Brien.
In a company notice obtained by the Wall Street Journal, Yellow said that it was “shutting down its regular operations on July 28, 2023, closing and/or laying off employees at all of its locations.”
The company has already laid off hundreds of workers, with thousands more facing unemployment if the company officially files for bankruptcy, which is widely expected. Reported first-quarter debt for the company was $1.47 billion with just $806 million in assets, according to Forbes.
According to the Journal, Yellow had a fleet of around 12,000 trucks which moved freight across the country for companies like Home Depot and Walmart.
Union leadership has blasted the management of the company, saying that company brass was largely responsible for the financial problems.
“Teamsters have kept this company afloat for more than a decade through billions of dollars in wage, pension, and work-rule concessions,” a union spokesman said. “Yellow couldn’t manage itself, and it wasn’t up to Teamsters to do it for them.”
The company has faced bankruptcy before, nearly collapsing in 2009, but managed to stay afloat after employees took wage cuts and it negotiated a $470 million debt-for-equity deal.
Federal loans to the trucking company during the COVID pandemic have been heavily criticized, with one congressional report saying that federal policy during national emergencies needed to be evaluated.
“While the national security loan program may have been a well-intentioned response to extraordinary events, it ultimately proved to be unnecessary and morphed into something Congress never intended — a risky taxpayer bailout for businesses, like Yellow, that struggled financially before the COVID-19 pandemic and were not critical to maintaining national security,” a congressional oversight report said.