'Greedy': Freight trucking company files for bankruptcy after getting $700 million pandemic loan
The freight truck company Yellow, formerly known as YRC Worldwide, is soon expected to declare bankruptcy "after monthslong negotiations between" the company's leaders and the Teamsters union led to a shut down, The New York Times reports.
Per the NYT, "After its bankruptcy filing, company officials placed much of the blame on the union, saying its members caused 'irreparable harm' by halting its restructuring plan."
However, the publication reports:
[The company] received the $700 million loan during the summer of 2020 as the pandemic was paralyzing the U.S. economy. The loan was awarded as part of the $2.2 trillion pandemic-relief legislation that Congress passed that year, and Yellow received it on the grounds that its business was critical to national security because it shipped supplies to military bases. Government watchdogs have scrutinized the loan because of the company's financial turmoil and close ties to the Trump administration, which awarded the loan.
"It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business," Chief Executive Darren Hawkins said in a statement. "We faced nine months of union intransigence, bullying and deliberately destructive tactics. The Teamsters union 'was able to halt our business plan, literally driving our company out of business, despite every effort to work with them.'"
Furthermore, transportation analyst Jack Atkins said that the company had faced adversity for some time, citing that "in the wake of the financial crisis, Yellow engaged in a spree of acquisitions that it failed to successfully integrate," and "the demands of repaying that debt made it difficult for Yellow to reinvest in the company, allowing rivals to become more profitable."
He said, "Yellow was struggling to keep its head above water and survive. It was harder and harder to be profitable enough to support the wage increases they needed."
Teamsters union General President Sean O’Brien, who called Yellow's leadership "'dysfunctional' and 'greedy'" said, "Teamster families sacrificed billions of dollars in wages, benefits and retirement security to rescue Yellow. The company blew through a $700 million government bailout.”
He urged them to "take responsibility for squandering all that cash."
The 99-year-old company, which "employed about 23,000 union employees" according to the report, says its "seeking bankruptcy protection so it could wind down its business in an 'orderly' way."
The New York Times' full report is available at this link (subscription required).
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