Shortly after less-than-truckload carrier Yellow Corp. said Tuesday it would go through with plans to defer required contributions to funds managed by Central States Funds, the International Brotherhood of Teamsters issued a strike notice.
The notice said a work stoppage could occur as soon as Monday.
“Yellow has failed its workers once again and continues to neglect its responsibilities,” said Sean O’Brien, Teamsters general president. “Following years of worker givebacks, federal loans, and other bailouts, this deadbeat company has only itself to blame for being in this embarrassing position.”
On Monday, Central States issued a delinquency notice to plan participants working at Yellow (NASDAQ: YELL) operating companies YRC Freight and Holland. The letter said the companies had deferred health and welfare and pension contributions due this past Saturday and would do the same for payments due August 15.
“The Company advised Central States Funds that it would defer payment of health and pension contributions for June (due July 15) and July (due August 15) to preserve liquidity as it worked to obtain meetings with the IBT [International Brotherhood of Teamsters] as well as secure additional financing,” a Tuesday evening statement from Yellow read.
The combined payments total $50 million for the two-month period.
A recent filing with the Securities and Exchange Commission showed Yellow had in excess of $100 million in cash as of June 30.
Yellow has said it will repay the amounts with interest in the future.
If unpaid, the carriers’ participation in the pension plan would be terminated on Sunday and health care claims incurred by employees after Saturday would not be paid.
Employees have the option to pay for health care out of pocket. In a separate notification, Central States said the cost is $471.86 per week through July 29. The amount increases to $507.08 per week after that. Payments must be received by August 23.
Yellow and the Teamsters have been unable to reach an agreement on operational changes that the carrier says are necessary for it to remain in business.
The Teamsters statement said the company has until Sunday to make the payment.
“Yellow has a responsibility and obligation to workers. Our members should not suffer because of management’s incompetence and financial irresponsibility,” said Fred Zuckerman, Teamsters general secretary-treasurer. “The Teamsters are working with our local unions, and we will continue to regularly update members as this situation unfolds.”
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Bad Driver
Zippy doesn’t know what he’s talking about. The teamsters carried our health and welfare during covid because the company didn’t. They are painted as the enemy, whereas anyone who has skin in the game knows yellow did this to themselves. The government is complicit by allowing the massive acquisition of multiple LTL carries back in 2005. This is why we have anti-monopoly laws in the books that Washington cars not to enforce.
Joseph sylvain
It’s time for Yellow to go away they have destroyed unionized trucking buying great companies and putting them out of business now It’s their turn in my opinion they y still own Saia they created a new holding company and spun them off years ago and then they grew throughout the country this was their plan.
Jeff
The Teamster’s blocked the changes needed to modernize Yellow’s operation and then refused to negotiate. Guess the union wants Yellow out of business.
Nathan NPME
Yellow has said for months this COO needs to happen to remain in business. Yellow has told Teamsters they need to agree for months for the company to remain in business. Yellow has said they cannot refinance their debt to get more money for any raises until these changes are agreed too. Now the Teamsters are outraged and shocked that Yellow is going out of business?
Teamsters chose this path. The consequences were laid out and Teamsters would not budge. Perhaps they thought Yellow was posturing and this was a bargaining tactic and they could call the bluff? However, when all the banks indicated there was no chance of refinancing without the Teamsters onboard, that should have been a clue that this wasn’t a bluff. Teamsters decided to stand their ground and now they will lose 22,000 union jobs.
Sure, Yellow is poorly run and makes horrible decisions, they destroyed once good companies with their bad decisions. Teamsters gave up plenty, but now was not the time to hold strong and demand it back, when it was obvious they had no way of giving it back. Good riddance to Yellow and the Teamsters who chose this demise.
Dick Bischoff
Facts do matter folks. The teamsters owned 79% of the LTL freight market 50 years ago. They own about 17% today and the percentage is dropping like a rock as Yellow and TForce revenues are in steep declines. Why have hundreds of teamster trucking companies shut down the past 50 years while non union carriers have thrived? The teamsters are toxic, their work rules strangle productivity and drive up costs. Relationships between teamsters ( led by the thug O’Brien) and mgmt could not be worse. The teamsters try their best to put Yellow’s failures all on mgmt, anyone with half a brain knows the real story.
Chris
Why cant employees pay for their own healthcare like every other company in the world? We pay like half the company pays half, just like retirement. I dont expect my company to pay me for the rest of their lives, they might not be around that long. I don’t mind putting money in my 401k and my company matches 6%, like they are playing hardball and are all going to be out of 220k jobs, and whos going to look stupid then, Yellow wont budge and will go bankrupt, they don’t have any other choice. Then everyone will just move over to TF, ABF, ODFL or whoever will have them, families will be out of money for weeks or possibly months.
Freight Zippy
Didn’t the teamsters just get $120 BILLION in Corporate Welfare from The Biden Administration?
Why not use some of the Corporate Welfare that no other LTL Carrier received to prop up these workers benefits until this gets settled?
Once again we have a union willing to sacrifice thousands of workers livelihoods while their greed goes unchecked.
Sickening…
JHT
It’s not plans to defer payments it’s called not paying your contractual obligations on purpose.
They have not been stonewalled by the Teamsters, they are the ones who stopped the change of ops in December (read the letter)and then never said a peep until they started screaming about how they are out of money and work rules changes were needed now. The changes would not instantly fix their liquidity issues and they know it. Fact: They have wrecked everything thing they have touched. That is their only accomplishment.
I hope a Federal Judge gets this asap and puts responsible people in charge before liquidation.
What Hawkins et al have done to tens of thousands of families is criminal.