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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Terry
-Vincent- In regards to the pension will be covered by the government(US tax payers actually). That is why the government for the last few years have put so much money into the company and even gave a Covid payment to try and keep them afloat that YRC would sometime become profitable and not need the money from the government and posssibly *cough* pay back the government.
James
They will find out just how valuable they are when they hit the job market.
Mark Schloer
it’s very doubtful and almost a certainty that they won’t be able to pay up before Sunday.
and the final nail in a Yellow Coffin strikes home !
so, honestly. What good is a strike going to do to an essentially bankrupt company?????
Hardline abfer
They are in a multi employer pension fund there pension is protected and they will receive their pension.
Jason
Union intentions and union realities are not the same. If the power of unions is used properly it can be a very effective vehicle for workers in combating corporations in a system that automatically favors money, unfortunately unions like governments are only as effective and non-corrupt as the people running them.
Reading through the comments there are several that say the teamsters should capitulate to keep Yellow in business. The point missed here is the fact that the union has consistently capitulated their members future to keep Yellow in business. When is too much too much? I’m happy to see the union finally take a stand however it’s way too late. This failure is laid at the feet of Yellow management or lack there of, maybe had they not treated their employees as the enemy while we were giving up wages and security things would be different.
Rest assured Yellow management will retire to the Caribbean flush with cash when this mismanaged company finally ceases to exist, after all this is America.
Vincent
If YRC were to shut down and go away, I assume a retirees pension will also go away, right?
Marc
It is quite obvious – unionized carriers can not compete with non-union carriers – so, the teamsters need to get it in their head – having a job, where they actually have to work and not hide behind a bunch of crazy, non productive union work rules, or have no job at all. Most unions are POISON to companies. They had their place 100 years ago, but not in today’s environment. TEAMSTERS – WAKE UP!!!!!
Vincent
How will this effect a retirees pension if yellow closes? I assume it will go away as well?