The Teamsters Union announced on Sunday that cash-strapped US trucking company Yellow Corp (YELL.O) has suspended operations and is declaring bankruptcy after failing to restructure and refinance more than a billion dollars in debt.
An inquiry for comment from Reuters was not promptly answered by Yellow, formerly known as YRC Worldwide.
“Yellow has historically shown that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions of dollars in bailout funding from the federal government,” Teamsters General President Sean M. O’Brien said in a statement.
Yellow avoided a planned walkout by 22,000 workers who are represented by the Teamsters earlier this month, and last week it revealed it was looking into ways to sell its third-party logistics business.
The business ranked third among U.S. truckers and specialized in the less-than-truckload market, which aggregates shipments from various clients into a single trailer.
Large retailers like Walmart (WMT.N) and Home Depot (HD.N), manufacturers, and Uber Freight were among its clients. Some of these businesses stopped shipping cargo to the company because of concern that the items might be lost or left stranded if the carrier went out of business.
The firm claimed in June that “One Yellow” restructuring and modernization initiatives were being obstructed by the Teamsters Union and were essential to Yellow Corp‘s survival and capacity to refinance approximately $1.3 billion in debt that must be repaid by 2024.
The U.S. government under Donald Trump gave a $700 million pandemic relief loan in 2020 in exchange for a 30% share in the Nashville, Tennessee-based business. This debt is a portion of that loan.
The Wall Street Journal reported the closure of the trucking company’s activities earlier in the day, citing notices given to clients and staff. The WSJ also reported on Friday that the corporation has let go of a significant number of nonunion employees.
