Some in the media have claimed that Yellow closed because of its dispute with the Teamsters. The truth is the company’s bankruptcy was decades in the making. Mismanagement and a financial crisis born on Wall Street caused the company’s demise.
“Yellow’s problems began in the late 1990s under CEO Bill Zollars,” wrote trucking analyst John Schultz in Logistics Management. “‘Dollar Bill’ talked big, dreamed big and built up the company to a $6 billion behemoth."
In 2003, Yellow bought Roadway for $1.1 billion then took on massive debt in 2005 to acquire USF for $1.47 billion.
“The goal was to emerge with a command position in the LTL space, allowing the company to leverage financial larger scale into greater operating and cost synergies,” reports Freightwaves.
But “Zollars’s dream of enacting hundreds of millions of “synergies” never materialized,” Schultz says. “Then, it became a fight for survival.”
That about sums it up.
Teamsters Give, Yellow Takes
The same Teamsters at Yellow who are being blamed for the company’s bankruptcy actually bailed the company out. Members took a 15% wage cut and a 70% reduction in pension contributions.
But Yellow kept wanting more concessions, till there were no more to give and nothing left to save.
The last straw came when Yellow stopped paying into Teamcare, shorting our health fund by $50 million. Members’ health care was set to be cut off, so the union had no choice and had to say “No” to that final insult to members.
Now Yellow Teamsters, who sacrificed for over a decade to try to help save the company, are out of work.
We stand with them.