Yellow makes it official, information the most important chapter within the historical past of U.S. trucking

After days of hypothesis in regards to the firm’s destiny, LTL service Yellow has formally introduced plans to file for chapter and completely finish operations.

In a press release issued late on Sunday, August 6, the Nashville-headquartered Yellow introduced that the corporate filed for voluntary Chapter 11 chapter safety within the United States Chapter Court docket for the District of Delaware as a part of plans to liquidate and wind down operations.

Yellow says that the corporate is working with a debtor-in-possession financing facility to facilitate the orderly finish of the practically 100 12 months outdated firm’s operations.

With the closing of Yellow, roughly 30,000 union and non-union jobs had been misplaced.

“It’s with profound disappointment that Yellow broadcasts that it’s closing after practically 100 years in enterprise,” mentioned Yellow’s Chief Government Officer, Darren Hawkins. “At the moment, it’s not frequent for somebody to work at one firm for 20, 30, and even 40 years, but many at Yellow did. For generations, Yellow supplied a whole bunch of hundreds of Individuals with stable, good-paying jobs and fulfilling careers.”

Yellow blames the closure on the refusal of the Worldwide Brotherhood of Teamsters (IBT) to comply with the “One Yellow” marketing strategy. The One Yellow plan concerned combining the operations of YRC Freight, Reddaway, Holland, and New Penn right into a single service offering each regional and lengthy haul companies. The plan would have required the closing of some amenities and would have transformed some drivers into “utility employee” positions that may require native driving and dock work.

“All employees and employers ought to be aware of our expertise with the Worldwide Brotherhood of Teamsters and fear,” mentioned Hawkins. “We confronted 9 months of union intransigence, bullying and intentionally harmful techniques. An organization has the suitable to handle its personal operations, however as now we have skilled, IBT management was in a position to halt our marketing strategy, actually driving our firm out of enterprise, regardless of each effort to work with them.” 

Yellow supplied an in depth account of the battle in opposition to the IBT for One Yellow:

“The operational modifications essential to implement One Yellow required approval from IBT management. In August 2022, IBT management accepted the primary section of One Yellow within the western U.S. and the plan was a hit: redundancies had been lowered, freight departed terminals earlier and customer support improved. Sadly, regardless of Section One’s approval and success, IBT management applied a nine-month blockade, halting the rest of Yellow’s marketing strategy. This brought on Yellow irreparable hurt.

Within the spring, whereas their blockade of One Yellow was ongoing, IBT leaders demanded that Yellow open its contract practically one 12 months early, and Yellow agreed, but its goodwill was met with hostility. As a substitute of negotiating a contract, Yellow confronted months of public insult from IBT, together with a social media submit depicting a tombstone with Yellow’s title on it together with the dates 1924-2023. This ruthless marketing campaign included repeated public taunts calling for Yellow’s demise and was meant to place Yellow out of enterprise. On the similar time, IBT management unfold false claims that Yellow was attempting to precise “concessions” from its union workers. Nothing was farther from the reality. Mixed with months of refusals to barter, IBT leaders’ marketing campaign in opposition to Yellow brought on grave concern amongst buyers, drove away prospects, and put 30,000 jobs in danger.

By summer time, Yellow’s losses from the delay in implementing One Yellow had reached greater than $137 million in adjusted EBITDA. On June 26, 2023, Yellow filed a lawsuit in opposition to IBT citing breach of contract and lack of enterprise worth. The lawsuit is pending, and the damages have grown since.

Because the IBT continued to stonewall and publicly disparage Yellow, Yellow administration saved workers knowledgeable that the scenario was more and more dire. Yellow made it clear to IBT management that their blockade of One Yellow severely constrained Yellow’s money movement and its skill to refinance debt. Yellow was pressured to take measures to protect liquidity to present IBT leaders extra time to lastly have interaction. As a substitute, IBT leaders introduced a strike in opposition to Yellow’s then-significantly wounded firm. Prospects fled and enterprise was not recoverable.”

“Whereas IBT leaders might imagine they received a battle in opposition to Yellow, it’s our workers and their households who’ve misplaced,” mentioned Hawkins. “We tried the whole lot to work with IBT management and did all we may to save lots of workers’ jobs. We’re crushed by at present’s announcement, but we’re grateful to our tens of hundreds of workers who took care of our prospects till the tip. Our workers are professionals who, regardless of heavy hearts, labored diligently to clear the docks, ship remaining freight, and shut our terminal doorways one final time. It’s with this similar professionalism that we intend to wind down our enterprise, maximize recoveries for collectors and pay again the CARES Act mortgage in full.”