It's the end of the road for Yellow, one of the nation's largest freight carriers
LEILA FADEL, HOST:
More difficult news for American workers. Some 30,000 people are losing their jobs as the shipping company Yellow appears to have collapsed.
A MARTÍNEZ, HOST:
During the pandemic, the government deemed Yellow essential to national security and propped it up with $700 million in loans.
FADEL: NPR's Camila Domonoske joins us now to talk about what's happening. Good morning, Camila.
CAMILA DOMONOSKE, BYLINE: Good morning, Leila.
FADEL: So Yellow isn't a household name like FedEx. If you could just tell us what this company is.
DOMONOSKE: Yeah. Folks might have seen the trucks on freeways. They say Yellow on an orange background, and it used to be known as YRC Freight. This is the third-biggest company in the less-than-truckload sector, which is if you have to ship something that's bigger than a parcel - too big for a parcel service - but not big enough to take up an entire shipping container, you use a company like this. We're talking about 30,000 jobs here, right? This is significant. Jack Atkins is an analyst who tracks this industry.
JACK ATKINS: This is the largest trucking bankruptcy in the history of the United States. I mean, it's almost hard for me to wrap my mind around, even though it's been the main thing we've been working on for the last, you know, few months.
DOMONOSKE: He actually drove out to his nearest Yellow terminal over the weekend and just looked at the chained-up gates.
FADEL: What have we heard from the company about the shutdown?
DOMONOSKE: From Yellow, nothing. They haven't responded to our requests for comment. But the Teamsters, which represent their unionized drivers, say that they have been notified that the company is shutting down. The union had previously warned drivers to pick up their personal items from work and prepare for the worst. The filing itself is expected as early as today.
FADEL: And what do we know about why the company is going bankrupt?
DOMONOSKE: Yeah. This has been seen coming for a little while now. And the company has previously blamed the Teamsters. Yellow has been trying to restructure - when executives say that that's essential in order for the company - would have been essential for the company to survive. In legal filings, they said the union was blocking the effort to restructure and, quote, "knowingly and intentionally triggered a death spiral for Yellow." Just this month, the threat of a strike scared a lot of customers away. Atkins, that analyst, called it a mortal blow.
The Teamsters say that it's the company's gross mismanagement that caused the underlying problems here. That's not the workers' fault. And that strike threat, it was triggered because the company wasn't paying for pensions and benefits. So it's a symptom of financial woes in addition to being a cause. The Teamsters are obviously the same union that just successfully negotiated a big deal with UPS. UPS is a big and a very healthy trucking company. Yellow is a different situation. It was deeply indebted and had been in financial trouble for years.
FADEL: Now, we mentioned that the government declared this company essential to national security. Does this mean the U.S. is less safe without it?
DOMONOSKE: Yeah. There's no reason to think that. A congressional oversight board has raised a lot of red flags about this pandemic-era loan to the company, including, yeah, why would the third-largest less-than-truckload shipper be essential to national security when other companies can ship this stuff, too? There's no good answer to that, really. The government didn't just give out this big loan. It actually took a stake in the company. So the U.S. Treasury, which is to say, all of us, is actually now the largest single shareholder in Yellow. Yellow was losing money even before the pandemic, so this oversight board said, you know, it seems like the government is probably not going to get its money back, which is an assessment that certainly looks accurate right about now.
FADEL: NPR's Camila Domonoske. Thank you, Camila.
DOMONOSKE: Thanks, Leila. Transcript provided by NPR, Copyright NPR.
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