Less-than-truckload carrier Yellow Corp. issued a statement Tuesday evening saying it would defer its required contributions for June and July as planned, potentially resulting in a strike by some of its Teamsters workforce.
Central States Funds, which manages health and welfare and pension funds for Teamsters at Yellow (NASDAQ: YELL) operating companies YRC Freight and Holland, issued a delinquency notice to plan participants Monday evening. The notice showed the carriers’ participation in the pension plan would be terminated Sunday and health care claims incurred after Saturday would not be paid.
The letter said the company withheld the June payment and was planning to withhold the July payment. Central States estimated payments for the two periods to be more than $50 million.
A separate letter from the Teamsters on Monday advised the impacted local unions to demand payment by Friday or risk a work stoppage on or after Monday. The protocol is part of the parties’ collective bargaining agreement, which requires the union to give the employer 72 hours’ notice of a strike authorization.
“The Company advised Central States Funds that it would defer payment of health and pension contributions for June (due July 15) and July (due August 15) to preserve liquidity as it worked to obtain meetings with the IBT [International Brotherhood of Teamsters] as well as secure additional financing,” a Tuesday evening statement from Yellow read.
Yellow said the two months of deferrals would equal “approximately $50 million dollars” and reiterated that it had only deferred one of the two payments thus far.
“The company intends to repay the funds with interest immediately upon securing additional financing and has asked the funds to discuss acceptable terms,” Yellow’s statement read.
A recent filing with the Securities and Exchange Commission showed Yellow had in excess of $100 million in cash and cash equivalents as of June 30.
Plan participants have the option to pay for health insurance out of pocket, Central States advised. The health coverage costs $471.86 per week through July 29, increasing to $507.08 per week through July 2024, the notice stated. Payments must be received by Aug. 23.
Roughly half of Yellow’s Teamster employees are covered by Central States.
Asked about the likelihood of a work stoppage if the payment isn’t made, Yellow declined further comment.
Yellow and the Teamsters remain at odds over proposed operational changes, which the carrier maintains are required for its survival.
Editor’s note: This story was updated on July 19 to reflect that the Teamsters have filed a strike notice. Teamsters issue strike notice at Yellow
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Thkidd
The only way the banks should give YRC financing is if Darrin Hawkins and cfo and all those other people resign, forfeit the golden parachute, the banks need to be aware of these guys incompetence and how they have squandered 14 + years of contributions the teamsters have made…
The cat has 10 lives
Can’t fund it without financing
Can’t finance without an updated union contract
Can’t get a union contract until August when UPS is done.
So it won’t be funded until August.
Other option is strike and lose your job and it still won’t be funded.
I hate it all but think about it.
You can say go work somewhere else but in small towns you don’t have openings even for truck drivers and most people don’t want to move to large cities to work.
Central states has the money to float it they got billions from the government. Just float it to save your members.
R Francis
Darren Hawkins should resign or be manually “taken out” for stupidity if nothing else. Bill Zollars should be held accountable to a certain extent as well. Mitch, Mark and 90% of VP’s and GOM’s, TOM’s plus ALL other BOGUS CREATED POSITIONS should be 86’d! An investigation by the SEC should be initiated as there is NOTHING BUT INSIDER TRADING & MANIPULATION of stock prices! Management is a CESSPOOL of CORRUPTION that the investors would be Enlightened to know. Especially how this company WASTES & SQUANDERS their money.
Joshua Johnston
They are becoming a non profit organization.
JHT
We’re not paying. -Mgt
We’re not working. -Humans
Zoomer
Worked for Holland for a brief year in their office. Job itself was okay, Darren would constantly send out emails stating everything was a-okay, and then here we are, about a year later. Yet again reflecting the behavior I saw on the local level even, of non-union managers/ leaders wanting to push the limit against the Union for their own enrichment. Wish I was still part of IBT, but had to get out of that job and on to greener pastures. Yellow pulling this move in their current situation just shows they really don’t want to give an inch to a brotherhood that’s made so many concessions for them over the years, only to be met with a smirk and shrug of “oopsie, we can’t give it back!” when asking for deserved increases in employee compensation. I truly wish Teamsters the best in this battle with this predatory money-blackhole of a company.
Yellow driver
“….proposed change of operations, which the company views as the linchpin to its survival.”
Is a friggin joke. Instead of a yellow road driver driving 500 miles a night and going home. They want him to pound the dock for 3 hours in between. That’s real safe and sure as hell not going to save any company! 14 straight years of mismanagement, should have fired the CEO during the first of 5 bankruptcies!!!
Zud
Wow…and it gets better. What a sh*t show.