The Nashville-based Yellow Corporation blamed the union for running the company into the ground, while the union accused management of failing to do their jobs.
On Sunday, Yellow Corporation, the third largest trucking company in the United States, informed its 30,000 employees, 22,000 of whom are union, that it would be ceasing operations after 99 years following a series of poorly executed mergers and a legal battle with the Teamsters.
The Nashville-based Yellow Corporation blamed the union for running the company into the ground, while the union accused management of failing to do their jobs.
According to the Wall Street Journal, representatives for the Teamsters revealed that Yellow sent a letter to employees and customers stating that it was shutting down and intended to file for bankruptcy.
The move was not entirely unexpected. Last week, Yellow stopped accepting new shipment requests, and on Friday it fired hundreds of non-union employees.
Over the past two decades, Yellow completed a series of mergers, acquiring competitors for hundreds of millions of dollars apiece. Management opted to integrate the corporate backends of all the companies, while keeping their operations separate.
The move resulted in the accumulation of millions in debt, and put the company on the brink of bankruptcy in 2010, 2014, and 2020. In the latter instance, crisis was averted via a controversial $700 million Covid-19 rescue loan from the federal government.
Despite their best efforts, executives at Yellow failed to get things back on track, and before long a cost-cutting plan was put in place. The move drew the ire of the Teamsters, who according to a union spokesman, "have kept this company afloat for more than a decade through billions of dollars in wage, pension and work-rule concessions."
Earlier this year, the union said if Yellow wanted to implement the changes, it had to renegotiate its contract before it expired in March 2024. Yellow responded by filing a lawsuit against the Teamsters in June, accusing the group of having, "breached their binding union contract with Yellow causing more than $137 million in damages by unjustifiably blocking, for over eight months, Yellow’s restructuring plan to modernize its business, which is necessary to compete against non-union carriers." The company added that, "Without these crucial reforms, which are standard practice in the industry today, Yellow likely will not survive."
A Kansas judge sided with the Teamsters less than a month later, but warned the union that "while it won today’s battle, it could very well lose the war." Yellow vowed to take the case to federal court.
Libby’s Desk
Commentary and must-reads from Libby’s desk, straight to your inbox.
TPM Newsletter
The Post Millennial’s top stories, delivered to your inbox.
