The company sought federal protection and filed for bankruptcy.
“Dear customers and employees. All company operations have ceased as of Sunday, July 30, 2023 at 12:00 p.m. m. EDT”. With this notice, Yellow closed its operations after 100 years of history in the industry in the United States.
The company urged, in the same notice, its employees to contact their Teamsters union representative. The company sought federal protection and filed for bankruptcy.
From July 28 onwards, the 22 thousand employees plus the 8 thousand executives knew that they were going to lose their jobs immediately. The union, in dialogue with Yellow some time ago, announced to everyone that they had to remove their personal items before the imminent closure.
“Founded as the nation’s first break-bulk trucking company, Yellow began its journey nearly 100 years ago. And now, we are building on our legacy as creators of the LTL industry, strengthened by our superior network, our extensive shipping footprint, and more than 30,000 dedicated employees across the country”, refers to the closure of the company.
In their official social networks there is no information about the closure either. Just a sign hanging on the premises which are now behind closed doors and padlocked.
“Today’s news is unfortunate but not surprising. Yellow has historically shown that it could not manage itself despite billions of dollars in concessions to workers and hundreds of millions in bailout funds from the federal government. This is a sad day for American workers and the freight industry,” said Teamsters General President Sean M. O’Brien.
The union also remarked that more details about the situation of the employees of the third largest trucking company in the country will be released soon. “Teamsters are committed to ensuring that members are protected and notified with the latest information,” they explain.
Yellow and an impossible debt to pay
The company’s bankruptcy was accelerated by a package of federal loans made during the Covid-19 pandemic and in the Trump administration. Yellow became an essential business. With that money, he bought tractors and trailers, and in exchange, the government got a 30 percent stake in the company.
This factor, added to the high costs of the company, the loss of a large percentage in the LTL market and the threat of strike by the Teamstears left the company “mortally wounded”, according to Stephens analysts detailed in the Transport portal Topic.
The strike threat had to do with health insurance. Before the closure, the employees were fighting for the company to provide them with this protection. But the company was able to reach an agreement to avoid the strike. Yellow agreed, just days before closing, to pay a $50 million refund to the Central States Pension Fund.