Troubled trucking company Yellow, founded in 1924 in Oklahoma, is reportedly filing for bankruptcy – bringing major implications to thousands of its employees across the U.S.
The company operates a fleet of around 12,000 trucks and carries freight for large companies such as Home Depot and Walmart. This might end the company’s 99-year existence, though this is not the first time Yellow has faced financial trouble.
According to the Wall Street Journal, the filing could mean up to 30,000 jobs lost. Adding to its financial troubles, Yellow took out about $700 million in loans from the federal government in 2020. Reported debt for the company in the first quarter of 2023 was $1.47 billion with only $806 million in assets, as reported by Forbes.
Union leadership has expressed its disapproval over the company’s management, blaming them directly for the financial crisis. Yellow itself said in a company notice that it is “shutting down its regular operations on July 28, 2023, closing and/or laying off employees at all of its locations.” Their layoffs began months ago, and the situation worsens as the company moves towards bankruptcy.
“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.
“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.”
Yellow nearly went bankrupt back in 2009, only to be saved by its employees’ wage cuts and a $470 million debt-for-equity deal. The use of federal funds for the company when disaster struck has been heavily criticized, with one congressional report saying that federal policy during national emergencies needed to be re-evaluated.
The bankruptcy of Yellow has made it evident that businesses are still struggling to stay afloat in the wake of President Joe Biden’s “Bidenomics.”
Yellow struggled in 2009 when Obama was president and was forced to throw in the towel when Biden took office. Notice they didn’t have an issue during the Trump administration.