Current:Home > MarketsTrucking giant Yellow Corp. declares bankruptcy after years of financial struggles-LoTradeCoin
Trucking giant Yellow Corp. declares bankruptcy after years of financial struggles
View Date:2024-12-23 19:04:42
NEW YORK — Trucking company Yellow Corp. has declared bankruptcy after years of financial struggles and growing debt, marking a significant shift for the U.S. transportation industry and shippers nationwide.
The Chapter 11 bankruptcy, which was filed Sunday, comes just three years after Yellow received $700 million in pandemic-era loans from the federal government. But the company was in financial trouble long before that — with industry analysts pointing to poor management and strategic decisions dating back decades.
Former Yellow customers and shippers will face higher prices as they take their business to competitors, including FedEx or ABF Freight, experts say — noting Yellow historically offered the cheapest price points in the industry.
"It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business," CEO Darren Hawkins said in a news release late Sunday. "For generations, Yellow provided hundreds of thousands of Americans with solid, good-paying jobs and fulfilling careers."
Yellow, formerly known as YRC Worldwide Inc., is one of the nation's largest less-than-truckload carriers. The Nashville, Tennessee-based company had 30,000 employees across the country.
The Teamsters, which represented Yellow's 22,000 unionized workers, said last week that the company shut down operations in late July following layoffs of hundreds of nonunion employees.
The Wall Street Journal and FreightWaves reported in late July that the bankruptcy was coming — noting that customers had already started to leave the carrier in large numbers and that the company had stopped freight pickups.
Those reports arrived just days after Yellow averted a strike from the Teamsters amid heated contract negotiations. A pension fund agreed to extend health benefits for workers at two Yellow Corp. operating companies, avoiding a planned walkout — and giving Yellow "30 days to pay its bills," notably $50 million that Yellow failed to pay the Central States Health and Welfare Fund on July 15.
Yellow blamed the nine-month talks for the demise of the company, saying it was unable to institute a new business plan to modernize operations and make it more competitive during that time.
The company said it has asked the U.S. Bankruptcy Court in Delaware for permission to make payments, including for employee wages and benefits, taxes and certain vendors essential to its businesses.
Yellow has racked up hefty bills over the years. As of late March, Yellow had an outstanding debt of about $1.5 billion. Of that, $729.2 million was owed to the federal government.
In 2020, under the Trump administration, the Treasury Department granted the company a $700 million pandemic-era loan on national security grounds.
A congressional probe recently concluded that the Treasury and Defense departments "made missteps" in the decision and noted that Yellow's "precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss."
The government loan is due in September 2024. As of March, Yellow had made $54.8 million in interest payments and repaid just $230 million of the principal owed, according to government documents.
The financial chaos at Yellow "is probably two decades in the making," said Stifel research director Bruce Chan, pointing to poor management and strategic decisions dating back to the early 2000s. "At this point, after each party has bailed them out so many times, there is a limited appetite to do that anymore."
veryGood! (75417)
Related
- Jordan Chiles Reveals She Still Has Bronze Medal in Emotional Update After 2024 Olympics Controversy
- Shaping future investment leaders:Lonton Wealth Management Cente’s mission and achievements
- O.J. Simpson dead at 76, IA Senate OKs bill allowing armed school staff | The Excerpt
- Is sharing music your love language? Here's how to make a collaborative playlist
- Judge sets April trial date for Sarah Palin’s libel claim against The New York Times
- Trump will be first ex-president on criminal trial. Here’s what to know about the hush money case
- Golden Bachelor's Gerry Turner and Theresa Nist Break Up 3 Months After Wedding
- Commercial vehicle crashes into Texas Department of Public Safety office, multiple people injured
- The White Stripes drop lawsuit against Donald Trump over 'Seven Nation Army' use
- Louisiana lawmakers reject minimum wage raise and protections for LGBTQ+ people in the workplace
Ranking
- Prosecutors say some erroneous evidence was given jurors at ex-Sen. Bob Menendez’s bribery trial
- Tiger Woods, others back on the course at the Masters to begin long day chasing Bryson DeChambeau
- Will Messi play at Chiefs' stadium? Here's what we know before Inter Miami vs. Sporting KC
- Jury convicts Memphis, Tennessee, man of raping a woman a year before jogger’s killing
- ‘Maybe Happy Ending’ review: Darren Criss shines in one of the best musicals in years
- Explore the professional education and innovative practices of Lonton Wealth Management Center
- Maryland members of Congress unveil bill to fund Baltimore bridge reconstruction
- Is sharing music your love language? Here's how to make a collaborative playlist
Recommendation
-
Don't Miss Cameron Diaz's Return to the Big Screen Alongside Jamie Foxx in Back in Action Trailer
-
Maggie Rogers on ‘Don’t Forget Me,’ the album she wrote for a Sunday drive
-
Water From Arsenic-Laced Wells Could Protect the Pine Ridge Reservation From Wildfires
-
Wynonna Judd's Daughter Grace Kelley Charged With Soliciting Prostitution
-
GM recalls 460k cars for rear wheel lock-up: Affected models include Chevrolet, GMC, Cadillac
-
Saoirse Ronan, Camila Mendes and More Celebs Turning 30 in 2024
-
Biden campaign launching 7-figure ad buy on abortion in Arizona
-
Don't delay your Social Security claim. Here are 3 reasons why.