Hey there, folks! Today we have some major updates to share regarding Yellow Corp., a prominent less-than-truckload carrier. Things have been getting pretty tense lately, and it looked like the company’s fate might be decided by the U.S. District Court for the District of Kansas. Let’s delve right into it!
So, here’s the story: Yellow Corp. and the Teamsters union have hit a bit of a rough patch. Teamsters have threatened to go on strike as early as Monday, all because of Yellow’s missed contribution payments to Central States Funds. The company requested deferments for payments due in July and August, but sadly, Central States said no go.
This has put Yellow in a bit of a pickle. In a court filing, they said, “Absent injunctive relief, Plaintiffs will suffer immediate, substantial, and irreparable harm from Defendants’ unlawful work stoppage, including being forced into a Chapter 7 liquidation bankruptcy proceeding.” Yikes!
Yellow’s plea to the court is to prevent the Teamsters union from stopping work and to get everyone back to the bargaining table. This is all tied up with Yellow’s restructuring plan called “One Yellow,” which aims to consolidate terminals, increase the use of third-party transportation, and make the company’s operations more flexible. Yellow insists that these changes are necessary for the company’s survival.
But the trouble doesn’t stop there. Yellow’s liquidity situation is a bit shaky. A recent filing showed that the company had over $100 million in cash at the end of June. But recent shifts by shippers and brokers moving away from Yellow have led to a rapid cash drain. Health, welfare, and pension payments for a two-month period total around $50 million, half of which Yellow is currently overdue on.
CEO Darren Hawkins and Teamsters General President Sean O’Brien have been exchanging letters about this complex situation. In one letter, Hawkins told O’Brien, “Indeed, the urgency is so acute that, although the Company has made its required contributions to nearly all benefit funds coming due this week, our current cash position will prevent the Company from making contributions to the three largest health, welfare and pension funds in which Yellow participates — Central States, Western Conference and Central Pennsylvania.”
In another twist, Yellow also proposed what would be equivalent to an $11 per hour wage and benefits increase over a five-year contract term, depending on the full implementation of the One Yellow initiatives. However, the union hasn’t accepted the offer yet, describing it as a “hypothetical increase” and “conditioned on future events.”
We learned over the weekend that the Teamsters and Central State of agreed to a 30 day extension, folks! Yellow Corp. is facing a tough battle, and we’ll be keeping our eyes and ears open for the outcome of the hearing. Keep in mind that in these uncertain times, a little bit of patience, understanding, and goodwill can go a long way. Stay tuned for more updates!
Matthew M. Leffler
Armchair Attorney, LLC
3N464 Vachel Lindsay Street
Saint Charles, Illinois 60175