The International Brotherhood of Teamsters balked at Yellow Corp.'s efforts to blame the union for financial difficulties that sent the short-haul trucker spiraling into bankruptcy.
Teamsters President Sean O Brien said Monday that the union sacrificed billions to keep Yellow afloat even as the company blew through a $700 million government bailout. For years, the company used its financial instability to obtain concessions from workers, he said.
Yellow s dysfunctional, greedy C-suite failed to take responsibility for squandering all that cash, Mr O Brien said in a statement. Yellow s management has had scathing criticism for the Teamsters in the wake of its demise, including an August 6 filing in which Chief Executive Officer Darren Hawkins said the company's financial debacle was caused by the union's bullying and deliberately destructive tactics. In a sworn testimony on Aug. 7, Chief Restructuring Officer Matt Doheny accused O Brien of using the company as a sacrificial lamb and said the Teamsters chief would rather see Yellow destroyed than be perceived as weak in negotiations. The Nashville-based company has filed for Chapter 11 bankruptcy, seeking to sell assets to cover a $737 million loan from the U.S. government and $485 million of debt from private lenders. The US carrier, the third-largest less-than-truckload carrier, was winding down operations last week, causing 30,000 people, including 22,000 union members, to quit their jobs.
Yellow was at one point the largest trucking company by sales after an acquisition spree in the early 2000s that saddled the company with debt. The financial crisis forced bondsholders to trade debt for equity to keep the trucker afloat. In 2011 losses piled up and the company had to restructure its debt again.
In the pandemic, the US government offered Yellow a emergency loan, which the administration said was needed to protect the Defense Department's suppliers. The US Treasury acquired an equity interest in the company, worth about 30 percent, as part of the deal.
Hawkins needed the union to sign off on the plan. The two sides had agreed to open their labor contract about a year early to discuss the strategy, but those talks never got off the ground.
The union argued that it needed to discontinue a $50 million payment to a centralized pension fund and in turn, the company sued the union for not negotiating in good faith. The strike was averted after the pension fund manager gave the company more time while keeping worker benefits intact, the company said in a statement. But customers began to leave, necessitating the company to file for creditor protection.
The union adds to two labor agreements ratified in July for the less-than-truckload units of ArcBest Corp. and TFI International, to rebut Yellow's accusation that the Teamsters were not willing to negotiate in good faith. The union has said both ArcBest and TFI both pay their union workers more than Yellow does.
Yellow said the union was using Yellow's situation in talks with other companies. The Teamsters reached a tentative agreement with United Parcel Service Inc. in July.
When mismanaged companies like Yellow cry are trying to modernize, they re telling you they want to take advantage of workers, said Fred Zuckerman, the company's general secretary-treasurer. Yellow's previous labor expenses were historically low compared to other freight leaders, but they still managed to drive the company to the ground. None Private Credit Funds move from Mergers to Timeshares and Car Loans.