Strapped for cash and facing a strike, the trucking company Yellow (YELL) is closing its operations and filing for bankruptcy, said the Teamsters Union in a press release.
The third-largest less-than-truckload (LTL) carrier and fifth-largest transportation company in the U.S. faced massive debt and a standoff against the International Brotherhood of Teamsters. The closure would mean 30,000 lost jobs.
Yellow urgently needed to refinance $1.3 billion in debt—a $567.4 million term loan maturing on June 30, 2024, and a $729.4 million U.S. Treasury loan maturing on September 30, 2024. The latter was part of a relief loan provided during the pandemic in 2020 in exchange for a hefty 30% stake in the company.
As of March, the LTL carrier had made $54.8 million in interest payments and repaid $230 million of the principal owed. The Treasury loan categorized the company as critical to the nation’s supply chain.
Yellow attempted to modernize through its “One Yellow” initiative, which it dubbed essential to its survival. The purpose of the initiative was to integrate its regional networks into one. However, the proposed changes faced union opposition since they affected the hourly wage rate and duties of nearly 1,000 truck drivers.
Yellow sued the union in June over allegations of blocking the restructuring plans. It lost the case but managed to avert the threatened strike earlier this month.
The company also explored plans to sell Yellow Logistics, its third-party logistics solution provider, and said it’s in talks with several prospective buyers.