Teamsters Halt Yellow Strike Plan After Benefits Extended
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The union announced on July 23 that a deal had been struck in which Central States is reversing its decision from July 17, and Central States will continue to provide health care benefits to the unionized drivers and their families.
The deal gives Yellow 30 days to reimburse the health and welfare fund, the union says, with the understanding the money will be repaid within the next two weeks.
On July 17, the Central States Pension Fund’s Board of Trustees voted to cease pension accruals for Yellow employees and suspend health care benefits for the parent company and two additional Yellow companies, Holland and YRC Freight, saying Yellow had failed to meet its financial obligations.
Yellow officials said they had no comment when contacted by Transport Topics.
“Our members at YRC Freight and Holland cannot work without health care, and the Teamsters worked tirelessly to ensure an immediate strike at Yellow could be averted,” IBT President Sean O’Brien said. “These discussions were not easy, but Central States has made meaningful movement under pressure from the union. We are seeking a real resolution, but let this solution today serve as a profound reminder that our members can only endure so many sacrifices. Teamsters at Yellow simply work too hard and have already given so much.”
Yellow Corp. was formerly known as YRC, and one of its regional LTL companies is Holland.
Central States serves as the administrator for Yellow’s multimillion-dollar health care plan and pension plan for its unionized employees.
On July 21, Federal District Court Senior Judge Julie Robinson ruled against Yellow as it was seeking an injunction against the Teamsters from striking as a result of the Central States health care decision.
Yellow officials have been in the midst of a yearlong corporate reorganization and consolidation of some of their terminals. The union contends those actions violate the parties’ collective bargaining agreement.
During the court hearing in its court filing, the company said if the judge denied its request it would have to file for bankruptcy.
The company also previously warned its shareholders and the federal government would be impacted by a business interruption. The government loaned the carrier nearly $730 million during the COVID-19 pandemic and it currently owns more than 30% of the company’s stock.
Much of the loan has been spent as the company used the money to replace its outdated fleet of trucks and attempt to improve its overall operation.
Earlier in July, Yellow sued IBT for $137 million, which it said was the cost of the union’s efforts to block the plan.
Company officials claimed the union had “taken up the role of public agitator for the company’s demise, recently tweeting an image of a headstone in a cemetery with ‘Yellow’ on it” and that they would not have filed the lawsuit if the Teamsters had agreed to “negotiate in good faith.”
Michigan State University business professor Jason Miller told Transport Topics that this deal has possibly bought Yellow some additional time.
“As long as there is not a strike that is imminent, there is a chance for them to survive,” Miller said. “They’ve been downsizing operations for the last couple of years as they try to integrate their subsidiaries and divisions together and identify opportunities for improvement and also get freight out of their network that really isn’t profitable.”
Miller says because of Yellow’s financial uncertainty and its fraught relationship with the union, the company has been losing business.
Miller points to Yellow’s financial statements going back to 2014 as evidence the company has been losing LTL market share little by little.
In 2014, the company said it was handling 58.28 thousand tons of freight per workday across its network, but in 2022 the figure had dropped by 47.8% since 2013 to 30.46 thousand tons daily.
“The big question now is whether some of their shippers will halt the diversion of their freight to other LTL carriers or whether there has been too much concern about the company’s viability and there is even more shifting of freight away from Yellow. They certainly are viable. They are 10% of the LTL market. They have a market, and when I hear some shippers say that if they shift away from Yellow to other LTL carriers, it will cost them 15% more, that tells me that as long as Yellow can haul the freight at that current price, there absolutely is a market.”
Nashville, Tenn.-based Yellow Corp. ranks No. 13 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 3 on the LTL list.
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