Yellow Corp., a beleaguered trucking company that was once one of the U.S.’ largest transporters of goods, has ceased operations and is planning to file for bankruptcy, the Teamsters Union said in a statement on Monday.
The company operated for nearly 100 years, but its financial challenges snowballed, leading it to accumulate more than $1 billion in debt.
“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,” said Teamsters General President Sean M. O’Brien in the statement. “This is a sad day for workers and the American freight industry.”
The company received a $700 million government loan during the pandemic, as part of the COVID-19 relief program in 2020.
Here’s what you need to know about Yellow shutdown:
Why is Yellow shutting down?
The shutdown comes after Yellow failed to reorganize and refinance the roughly $1.5 billion dollars it had, as of March, in outstanding debt, a large portion of which came from the $700 million pandemic-era government loan. At the time of the loan, the company was facing charges of defrauding the government by overbilling on shipments for the U.S. military.
The shutdown also comes amid its ongoing, and costly, conflicts with its employees. Last week, the company declined to contribute to its employees’ pension and health insurance plans, nearly prompting a strike.
Source: finance.yahoo.com