The apparent shutdown of one of the biggest trucking companies in the U.S. is having an impact north of the border, with the union for over 100 affiliated Canadian truckers claiming they’ve been told not to report for work.
Yellow Corp., formerly known as YRC Worldwide Inc., has ceased operations and is filing for bankruptcy, according to the Teamsters Union and multiple U.S. media reports, putting roughly 30,000 jobs in jeopardy.
Unifor Local 4209, which represents 128 truckers and linehaul drivers working for Canadian Yellow subsidiary YRC Freight Canada, said in a statement Monday its members were “simply told not to report for work.”
“The news is devastating for our members,” the local’s president Don Lajoie said in the statement, which warned of the human impact of “moving numbers around a page.”
“There are hundreds of families who are left with very little information right now.”
Yellow Corp. did not respond to a request for comment from Global News, and has also not answered similar requests from many other media outlets over the past few days.
No bankruptcy filings had gone live as of Monday, and the company’s website made no mention of a wind-down of operations, although a banner at the top of the homepage directed customers to reach out to its customer care office about shipments in progress.
YRC Freight Canada’s own website directed unionized and non-unionized workers to notices posted to their private employee portals and linked to Yellow’s customer care office, but otherwise showed no indication of a shutdown Monday. A request for comment was also not returned.
An official in Labour Minister Seamus O’Regan’s office told Global News on background that until YRC Freight Canada actually files for bankruptcy, federal worker supports like the Wage Earner Protection Program cannot kick in.
The government will be there to help Canadian workers impacted by Yellow’s shutdown once that bankruptcy filing is made, the official said, noting YRC Freight would have to make its own filing in Canada in addition to Yellow filing in the U.S.
In the meantime, the minister’s office has been in touch with the U.S. Teamsters union, which represents some Canadian truckers who drive for Yellow, as well as Unifor.
- As Canada’s tax deadline nears, what happens if you don’t file your return?
- Do you need to own a home to be wealthy in Canada? How renters can get ahead
- Posters promoting ‘Steal From Loblaws Day’ are circulating. How did we get here?
- Investing tax refunds is low priority for Canadians amid high cost of living: poll
In a Wednesday statement to The Wall Street Journal, which first reported the news of Yellow’s impending bankruptcy, the company said it was continuing “to prepare for a range of contingencies.” On Thursday, Yellow said it was in talks with multiple parties about selling its third-party logistics organization.
The Journal reported Yellow ceased operations on Sunday, following the layoffs of hundreds of non-union employees on Friday.
In an announcement early Monday, the Teamsters said that the union received legal notice confirming Yellow was ceasing operations and filing for bankruptcy.
“Today’s news is unfortunate but not surprising. Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” Teamsters general president Sean O’Brien said in a statement.
“This is a sad day for workers and the American freight industry.”
The company was the third-biggest U.S. trucker specializing in the less-than-truckload segment that combines shipments from different customers in the same trailer.
The apparent shutdown came just days after the company narrowly averted a strike by the Teamsters, which represents 22,000 unionized Yellow workers.
The heated dispute reached a boiling point when Yellow sued the union in June after alleging it was “unjustifiably blocking” restructuring plans needed for the company’s survival. The Teamsters called the litigation “baseless,” with O’Brien pointing to Yellow’s “decades of gross mismanagement,” which included exhausting a US$700 million federal government loan.
The strike was averted after a pension fund agreed to extend health benefits for workers at two Yellow Corp. operating companies. That agreement imposed a 30-day deadline on Yellow to pay an outstanding US$50 million in benefit payments to the Central States Health and Welfare Fund, which the Teamsters claimed was due on July 15.
Yellow Corp.’s most recent earnings report in May showed the company saw a net loss of US$54.6 million in the first quarter of this year, about double the loss seen in the same quarter of 2022. Executives cited continued impacts of a series of mergers and transition projects for the poor results. Operating revenue was about US$1.16 billion in the period.
A Wednesday investors note from financial service firm Stephens estimated that Yellow could be burning between US$9 million and $10 million each day.
As of late March, Yellow had an outstanding debt of about US$1.5 billion. Of that, US$729.2 million was owed to the federal government.
White House economic adviser Jared Bernstein assured in a CNBC interview that the news of Yellow’s bankruptcy “looks like more of a Yellow story than an economy-wide one.”
— with files from the Associated Press and Reuters
Comments