Yellow, one of the oldest and biggest U.S. trucking businesses, shut down on Sunday, wrecked by a string of mergers that left it saddled with debt and stalled by a standoff with the Teamsters union.
Yellow stock soars over 120% in morning trading after the trucking giant shuts down operations.
The 99-year-old company is known for its cut-rate prices and has more than 12,000 trucks moving freight across the country for Walmart, Home Depot and many other smaller businesses. What Yellow couldn’t deliver—despite swallowing rivals, getting union concessions and securing a government bailout—was consistent service for customers or profits for investors.
The Nashville, Tenn., company sent out notices to customers and employees saying it was ceasing all operations at midday Sunday. The company is preparing to file for bankruptcy and is in talks to sell off all or parts of the business.
A failure imperils nearly 30,000 jobs, including around 22,000 Teamsters members. Hundreds of its nonunion employees were laid off Friday after the company stopped taking in new shipments from customers.
It would be the biggest collapse in terms of revenue and jobs for the fickle U.S. trucking industry, though customers say disruptions should be limited. Many shifted their cargoes to rivals in recent weeks, hastening Yellow’s demise. Competitors said their volumes jumped last week.
“Teamsters have kept this company afloat for more than a decade through billions of dollars in wage, pension and work-rule concessions,” a union spokesman said. “Yellow couldn’t manage itself, and it wasn’t up to Teamsters to do it for them.”
Since 2021 Yellow has pursued a cost-cutting and integration plan that executives said would improve the business. A spokeswoman for Yellow said it hasn’t asked the union for concessions in its recent restructuring. “Yellow offered to pay its employees more,” she said. The union “refused to negotiate for nine months.”
A shutdown would also bring new scrutiny to the Trump administration’s decision to give the company a $700 million Covid rescue loan in 2020. The U.S. Treasury now holds about 30% of Yellow’s shares, which have plunged and ended Friday at 71 cents apiece.
“It’s an incredibly sad situation because there’s the potential that this company that was about to celebrate its 100-year anniversary next year may not be around,” said Chris Sultemeier, a Yellow board member since 2020 and former head of logistics for Walmart.
In a memo Friday, the Teamsters told union locals that the “likelihood that Yellow will survive is increasingly bleak.” The union urged members to take their tools and personal belongings home so items don’t get stuck behind locked doors following a bankruptcy filing.
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