Yellow Corp. fails to pay into pension fund, triggering possible strike
Teamsters working for Yellow Corp. could go on strike on July 24 after the companies “failed to fulfill their financial obligations,” the union said in a statement on Tuesday.
Yellow Corp. will be kicked out of the Central States Pension fund on July 23, according to a letter from Thomas Nyhan, executive director of the fund’s board of trustees.
Teamsters president Sean O’Brien said that the company’s failure to pay into the states’ funds was due to “gross mismanagement.”
“Following years of worker givebacks, federal loans, and other bailouts, this deadbeat company has only itself to blame for being in this embarrassing position,” O’Brien said.
A spokesperson for Yellow Corp. told The Hill the company is going to pay into the fund.
“The company intends to repay the funds with interest immediately upon securing additional financing and has asked the funds to discuss acceptable terms,” the spokesperson said in an email to The Hill.
A letter from Yellow Corp. to President Biden sent on June 29 implies that unions currently have the upper hand in negotiations and that plans to modernize the company are getting railroaded.
“As a result of union intransigence, Yellow’s business plan has been frozen. The company has lost market share and has been unable to secure additional lending for day-to-day business operations,” the letter from Yellow CEO Darren Hawkins and chairman Matt Doheny reads.
Yellow says it’s current with its payments for the loan it got from the U.S. Treasury.
“The U.S. taxpayer holds an additional investment as a 30 percent equity stake holder in Yellow,” the letter says, although it’s not exactly clear how those equity stakes are remunerated to individuals and households.
Yellow filed a complaint against the Teamsters in federal court in June, alleging a breach of contract resulting in $137 million in damages to the company.
The company says it’s having trouble competing against non-unionized businesses, a claim that has also come up in the labor fight between Teamsters and UPS, specifically referring to the non-unionized Amazon.
“Yellow … has been engaged in a critical initiative to restructure and modernize its business and upgrade the efficiency of its operations, so that it can compete successfully against centralized and non-unionized trucking companies to which it has steadily and increasingly lost business,” the federal filing says.
At the end of last year, 82 percent of Yellow Corp.’s workforce was subject to a collective bargaining agreement, according to a company filing.
The troubles at Yellow Corp. come amid major tremors in the heavily labor-dependent logistics and transportation sector, in which the workforce is facing a cost-of-living crisis due to elevated, profit-led inflation.
“If our relationship with our employees and unions were to deteriorate, we may be faced with increased labor costs, labor disruptions or stoppages or general uncertainty by our customers, which could have a material adverse effect on our business,” the company said in its most recent annual filing.
Updated: 12:18 p.m.