Wall Street Journal Reports: Yellow, a US Trucking Company, Ceases Operations
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| Wall Street Journal Reports: Yellow, a US Trucking Company, Ceases Operations |
On July 31, according to a statement from the Teamsters Union, Yellow Corp (previously known as YRC Worldwide), a financially strained U.S. trucking company, has halted its operations and is taking the step of filing for bankruptcy.
The company faced significant challenges in reorganizing and refinancing its debt, which amounted to over a billion dollars. Despite being approached for comment by Reuters, Yellow has yet to respond.
In a positive development earlier this month, Yellow managed to avert a potential strike from its 22,000 Teamsters-represented workers. However, the company is now considering opportunities to divest its third-party logistics division as it navigates through its financial difficulties.
"According to Teamsters General President Sean M O'Brien, Yellow's historical track record showcases an inability to effectively manage its operations, despite benefiting from substantial worker concessions and bailout funding amounting to hundreds of millions from the federal government," stated in an official release.
Yellow, previously the third-largest U.S. trucking company focusing on the less-than-truckload segment, efficiently consolidating shipments from various customers within a single trailer.
Among its clientele were major retailers such as Walmart (WMT.N) and Home Depot (HD.N), along with manufacturers and Uber Freight. Some of these businesses temporarily halted cargo shipments to Yellow due to concerns that their goods might be at risk of being lost or stranded in case of the carrier's bankruptcy.
Back in June, Yellow revealed that the Teamsters Union was obstructing vital restructuring and modernization initiatives, collectively referred to as "One Yellow." These efforts were deemed crucial for Yellow's survival and its capacity to refinance approximately $1.3 billion of debt scheduled for repayment by 2024.
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As part of its debt burden, a $700 million pandemic relief loan was extended to the Nashville, Tennessee-based company by the U.S. government under the leadership of Donald Trump in 2020, which resulted in a 30% ownership stake.
Earlier in the day, the Wall Street Journal disclosed the trucking firm's cessation of operations, citing notifications sent to both customers and employees. Additionally, the WSJ reported on Friday that a substantial number of nonunion workers had been laid off.
The report was compiled by Yana Gaur, Urvi Dugar, and Bharat Govind Gautam in Bengaluru, with editing contributions from Chris Reese, Stephen Coates, and Nivedita Bhattacharjee.
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