Blame Game Rises From Yellow Collapse
Who lost Yellow? The implosion of the 99-year-old trucking firm has parties pointing fingers every which way. Was it bad management, including debt-raising acquisitions? The Teamsters? A questionable government bailout? All, it seems, are telling their side of the crisis, though the company itself has been the most bashful.
Nashville, Tennessee-based Yellow has had financial woes for years. It all came to a head late last week. On Friday, it notified customers and employees it was shutting down operations on Sunday. Yellow hadn’t yet said anything publicly.
The Teamsters, however, looking to get ahead of the story, put out a press release Sunday (though it’s dated Monday) saying that Yellow informed it that it would file for bankruptcy. The company and union had been in contentious contract negotiations.
“Today’s news is unfortunate but not surprising,” Teamsters General President Sean M. O’Brien said in the release. “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.”
That statement came out several hours after The Wall Street Journal broke the story. A Yellow spokeswoman told the WSJ the company hadn’t asked for labor concessions and had offered pay increases for the union, which refused to negotiate.
The cratering of the company means the loss of 30,000 jobs, including 22,000 Teamsters drivers and dock workers. It’s the biggest collapse for the U.S. trucking industry in terms of revenue and jobs, according to the WSJ. Customers have included Amazon, Walmart and Home Depot.
Some people blame the mismanagement, and lack of integration, of acquisitions of competitors going back two decades. Then the company was hurt by the 2008 recession. The threat of bankruptcy often loomed.
The Yellow spokeswoman (in a typical comms tactic of blaming prior leaders) told the WSJ that the current board and management weren’t responsible for legacy debt, failures to integrate and union concessions. The WSJ quoted one former Yellow CEO saying the company’s undoing was its debt, but another former CEO said the problem was not the debt.
Other than the unnamed spokeswoman in the WSJ, the company has been mostly silent. Journalists have noted it hasn’t returned their calls for comment. It hasn’t put out a press release — on anything — since July 27. Why the silence? Not good. And where’s the bankruptcy filing, which was rumored to be coming Monday this week? Bloomberg reported that Yellow has been lining up a bankruptcy loan.
Also involved in the mess is a $700 million COVID-relief loan the Trump administration made to Yellow in 2020, giving the government 30 percent of its shares (whose price has oddly been skyrocketing, apparently due to the company’s real-estate holdings). A congressional report this year said Yellow didn’t meet the requirements for the loan, so it shouldn’t have been made.
Photo Credit: Yellow via Facebook
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