Yellow exec tells sales staff company will file bankruptcy Monday

https://www.freightwaves.com/n...d=0035d00006rbmZEAAY

Yellow’s senior vice president of sales informed her staff on Wednesday that their last day would be Friday and the less-than-truckload carrier will file bankruptcy on Monday, according to three employees who attended the video call.

Yellow (NASDAQ: YELL) is the third-largest LTL company and employs some 30,000 workers, including around 22,000 Teamsters members. The trucking company had an operating revenue of $5.245 billion in 2022.

The sales employees were approved to tell customers of the bankruptcy plans and to take paid time off for the rest of the week.

In a meeting later Wednesday, according to a video of the meeting viewed by FreightWaves and two employees present, the senior vice president told employees to backtrack on the bankruptcy statement. She said to “correct” any customers that were previously told there would be a bankruptcy and to share the following statement:

“Yellow’s talks with the IBT are ongoing. As previously stated, and in keeping with fiduciary responsibility of the company’s executives, the company continues to prepare for a range of contingencies.”

A Yellow representative shared the same statement when FreightWaves reached out for comment to learn more about the message that the trucking company may file for bankruptcy on Monday.


Yellow’s vice president of technology services also told her team the above statement Wednesday afternoon, according to one Yellow employee. That employee said, previously in the day, their boss advised their team that a bankruptcy could happen at any time and to send out resumes.

This message has been edited. Last edited by: wcb6092,

Does that mean that Yellow is the new red?

Or is it the other way around?

They couldn't find someone to buy the company???

quote:

Originally posted by Rey HRH:
They couldn't find someone to buy the company???

The equipment I seen and worked on was pretty hashed.
They never fix anything till it's completely broken.
The shop was rebuilding the engines in rigs that were at a million miles, I did about 50 of them.
They got a screaming deal for it too, fat discount on parts and labor, the shop basically broke even on each one, not even worth it.
A reman engine is about $65,00.
To take an engine and make it factory fresh is about 120 hrs labor and they got it for 60 and I wound up with 120 hrs in a job.
And them being union was a real PITA
Rebuild an engine and send it back with a broken fan hub because they had to do it.

About 2001 they finally got trucks with A/C and power steering as they had no choice because it was standard.
That was the same time they had to start doing oil changes because they couldn't just plumb the oil into the fuel anymore due to DPF's.

Their shop was just a shed with plastic sheeting for walls down by the river.
Pretty hokey for such a large outfit.
But they got an 8 year 800,000 mile warranty and just ran them to death.
Volvo loved them though.

I worked for them, in a sales role, up until a year ago and still have several friends there. Fortunately I was recruited by a much stronger carrier. My heart breaks for the folks going through this.

Working for Yellow was a roller coaster for a long time and in speaking to my friends this week there have been a lot of sleepless nights recently. It still blows my mind how you can get 700 million dollars just three years ago and end up here today.

Part of the requirement when getting the loan was they could not cut staffing for financial reasons. So what do they do? They terminated employees for performance, 4 in northeast Ohio alone, all on the same day with no prior discussions regarding their performance. One of those folks was given accolades for his 35 year anniversary just two months earlier. Bad decision after bad decision has put them where they are today.

quote:

Originally posted by powermad:

quote:

Originally posted by Rey HRH:
They couldn't find someone to buy the company???

The equipment I seen and worked on was pretty hashed.
They never fix anything till it's completely broken.
The shop was rebuilding the engines in rigs that were at a million miles, I did about 50 of them.
They got a screaming deal for it too, fat discount on parts and labor, the shop basically broke even on each one, not even worth it.
A reman engine is about $65,00.
To take an engine and make it factory fresh is about 120 hrs labor and they got it for 60 and I wound up with 120 hrs in a job.
And them being union was a real PITA
Rebuild an engine and send it back with a broken fan hub because they had to do it.

About 2001 they finally got trucks with A/C and power steering as they had no choice because it was standard.
That was the same time they had to start doing oil changes because they couldn't just plumb the oil into the fuel anymore due to DPF's.

Their shop was just a shed with plastic sheeting for walls down by the river.
Pretty hokey for such a large outfit.
But they got an 8 year 800,000 mile warranty and just ran them to death.
Volvo loved them though.

Interesting. Powermad, if I may ask a question, how many miles will a well run company such as Fedx or UPS run a tractor till it get's a complete rebuild and how many miles before they just junk it and replace it?

I worked for Roadway Express, which eventually became YRC, from 1989 until 2009, just over 20 years. Always in a management capacity. Because of their, both Rex and Yellow’s, neighborhood philosophy, that being one-up each other when opening a new facility in the same community, there left lots of redundancy in the “system” when they combined. The fact that domestic manufacturing was tanking for years didn’t help.
I can’t believe they’ve ran the company into the ground. I wonder how they would have fared if Roadway bought Yellow, and kept our upper management? Guess we’ll never know. Happy to have got out when I did!

quote:

Bad decision after bad decision has put them where they are today.

It sounds like there is excess capacity in LTL trucking at this time and the world has a way of culling the weakest.

quote:

if I may ask a question, how many miles will a well run company such as Fedx or UPS run a tractor till it get's a complete rebuild and how many miles before they just junk it and replace it?

Quite a bit of the long haul Fed Ex stuff is owner operator outfits, they own the trucks and haul freight for Fed Ex.
Those rigs hit 1,500,000 miles in about 4 years and then they trade them in for a new one.
The Fed Ex day cabs are Fed Ex, they have a large shop and seem to keep their equipment maintained well.
They don't love Volvo as much as they used to and run Kenworth and Peterbuilt rigs around here.
I work for Kenworth now, not sure what the cycle schedule for them is but they constantly get new rigs in. Up to 20 at a time.

Hard to judge what UPS is doing as their stuff didn't come in to get fixed as often as the others, they do a lot of their own work including warranty work.
From what I understand they don't rebuild them, they just scrap them.

More interesting stuff Powermad. Thanks.

It appears they’ve ceased all ops with eminent bankruptcy filing tomorrow.

Fortunately I received all the orders I had on their network over a week ago. Stranded freight recovery may never reach its final destination.

Debt is financial satan. There’s a whole lot of fail here, but mostly management. They continually thought mergers/acquisitions (debt) the ole proverbial bigger watermelon truck was the answer. Bleed labor for concessions, gov for bailouts, rinse and repeat. This company deserves to fail.

I saw a video of 35 year employee on Tiktok after he was told they arent funding any of the retirement and he has nothing. I can't repeat the thoughts that went through my head!!!

quote:

Originally posted by Ronin101:
I saw a video of 35 year employee on Tiktok after he was told they arent funding any of the retirement and he has nothing. I can't repeat the thoughts that went through my head!!!

I can. Those execs better hire some damn good 24-hour security.

I used to work on the management side of Roadway and then the takeover merged company of YRC.

The union crushed them with demands that were unsustainable, at least on a 2 to 5 year basis. Labor is, of course, the highest cost and the union didn't have any qualms about asking for higher benefits under the, "YRC is to big to fail" umbrella but they were asking for much, even when the last contract came up for negotiation. YRC worked on concessions and the employees did to but the costs were exorbitant although to make it work, YRC needed share and thin profit was working while you had share. It's been their model for the last 6-10 years.

YRC tried to gain market share for a number of years by acquiring smaller lines but eventually, market share needs to have increased rates. The thought was that if they raised rates, they'd lose market share. Vicious cycle.

They'd run lean and mean but when you add in COVID and a lot of freight wasn't moving, it was a death spiral.

If YRC doesn't come back, others will fill the void since it's only about 15k packages a day but rates will go up for consumers and businesses.

For the most part, the employees were great and worked hard. You had some slugs, but you do anywhere. Managers were tough but it's like that at all freight lines and employees don't really like to be watched and told what to do.

They went from being a preferred way to ship, to us blackballing them as a carrier.

Given the rates, I can’t see there being a glut of LTL - but they were too incompetent to be used - at least in our area.

And why would the stock be up 60% right now?

quote:

Originally posted by apf383:
And why would the stock be up 60% right now?

It's a gamble... a bet on a buyer emerging.

https://reason.com/2023/07/28/...iles-for-bankruptcy/

Last month, Reason wrote about Yellow Corporation (formerly YRC Worldwide), a long-haul trucking company in dire financial straits. The company took a $700 million federal loan under laws passed to address the COVID-19 pandemic in 2020, in exchange for the government taking a 29 percent stake in the company.

Now, Yellow is expected to file for bankruptcy and employees are apparently being terminated, effective immediately.

A Yellow Corporation employee, who spoke on the condition of anonymity, tells Reason that according to a Friday conference call with Chief Information Officer Annlea Rumfola, all employees would be laid off but could expect severance. Rumfola did not respond to an email requesting comment before this article's publication; a Yellow spokesperson also did not respond to a voicemail or email requesting comment.

The employee shared with Reason an internal human resources document dated July 27. The document goes over the steps that terminated employees can take in order to receive final paychecks, including "accrued but unused paid time off," and how to qualify for severance pay. The amount of severance offered ranges from two weeks of pay for employees with up to nine years of service all the way up to 13 weeks of pay for executives ranked "Vice President or Above."

Yellow's issues involved more than just the Teamsters. As Reason wrote in June, Yellow took on a $700 million federal loan in 2020, intended to prop up businesses affected by the COVID-19 pandemic. But Yellow had lost $104 million the previous year. The money for the loan came from a separate fund established solely for companies deemed essential to national security. The Trump administration pushed the loan through on the basis of Yellow's status as a transportation partner for the Department of Defense and the Department of Homeland Security, even though at the time the Justice Department was investigating allegations that Yellow had intentionally inflated its shipment weights in order to overcharge the government. (The company settled the case for $6.85 million in March 2022.)

A May 2023 audit by the Office of the Special Inspector General for Pandemic Recovery determined that the loan was made without sufficient safeguards. It further revealed that on its loan set to mature in September 2024, Yellow owed $729.2 million and had only paid $230 on the principal balance.

quote:

Originally posted by apf383:
And why would the stock be up 60% right now?

Percentages don't matter. It's still considered a penny stock, even with the 60% increase. I think that increase moved the price to $15. That's way, way down from last year.

IMO there's no buyer. Unless you're talking about the fire-sale.

Word is that it is Chapter 7, not 11.