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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Veteran Driver’s PO’d Wife
If Yellow/YRC (or whatever they’re calling themselves THIS week) truly wants to “trim the fat,” why don’t they start where the excess REALLY exists—upper management! Did THEY ever take a cut in pay??? How much has it ever hurt any of those guys when they stopped paying into the pension, or when IBT negotiated to reduce driver pay? What did THOSE guys give up? I doubt they ever felt the pinch as we all scrambled to make ends meet. And now, after this HUGE Govt. bailout, the Company’s BROKE?!? They need to clean house and get Disney management in there! LOL If the Company goes out of biz, bankrupt, or some other “reorganization” process, don’t think for one minute that those guys at the top won’t be leaving with their pockets full of office supplies and golden parachutes! I’d like to receive as much as a golden kayak to be able to paddle through and away from this river of $#!@
tired yellow employee
The IBT is not in charge of the money, Yellow has contiously wasted millions of dollars keeping the same executives and upper management who makes the poor financial chooses in their positions.
700 million taxpayer funded loan, 15 % give back by employees, Pension was cut, Now they way to skip payments into the healthcare they claim on the side of the trailers, 100% paid for company healthcare is no joke.
Yea it is a joke, It is a joke the managers waster millions and keep their jobs while stabbing the employees in the back, lying to them
Yellow Worker
Can you cite the source of the Yellow statement? We’re being told internally that this is incorrect.
Bob - Tenured TM
Why is everyone pointing their fingers at Darren Hawkins ? What about the IBT ? They agreed to the phased approach for the success of the Company. All the other carriers are making a huge profit off this model. This is not 1984, businesses need to adapt and change. Look at what Amazon has done to the brick and mortar retail stores, they are closing.. Yellow was on plan to make it happen and it was stopped cold in its tracks. Road drivers not wanting to work the dock in the Midwest and East is a major factor in this. The IBT said open the contract..Yellow did. Yellow offered an additional dollar and hour to bridge the contract. The IBT still will not come to the table. Everyone loses if Yellow goes out of business. I also have a word of advice.. Non-Union Carriers will not hire Union Drivers, Dock Workers or Office staff. They may hire a few to make it look good, but they will be the younger non tenured Union members. Most Management/supervisors will be picked up by those Non-Union carriers for their knowledge of customers and crazy hours that need to be worked. Sorry to say the big losers will be the IBT members….Loss of Job, Benefits, Vacation time, Seniority and a job that has little pressure to perform. But I’m sure Sean Obrien will find every IBT member another job in his Union Utopia.
Corey
Ive worked for this company for many years and they treat their employees like slaves and dont care anything about the workers that drives this company in business. They are blood suckers and criminals. The administration should have been fired and charged criminally after receiving $750.000.000 and only 3 years later they are yelling that they are broke, how? Where did this money go? We didnt receive raises, no new equipment, no nothing. Where is the money, I telll you where those criminal in the administration took it and try blaming the union.
Donald Patterson
If this company continues to poor mouth it why don’t they terminate do nothing darren that will save a little money then go after some of his cronies get someone who knows how to run a freight company abf and the other non union freight who pay more than yellow doesn’t seem have a problem making money hauling the same frieght
tired yellow worker
hawkins goes on fox stating he is so concerned with saving 30,000 + jobs, and takes our insurance away from the 30,000+ workers and their families. Way to go!! i have worked here for over 20 years, they have spent millions on God knows what, not on us or equipment, maybe to line their pockets! when will they be held accountable? We have given enough!!! Yellow’s new slogan “no matter how much money you throw at Yellow, their always Red” (in the red)…
Jimmy Sampson
My family has given up in the neighborhood of 250 thousand dollars in lost wages plus a 75% reduction in pension benefits in order to save this company, only to watch management piss away the sacrifice we all made. All these concessions were supposed to be temporary, we were promised the company would be out of debt in five years, and our wages and pensions would be restored, that was 12 years ago, we are just now getting back to the wage we were making in 2007. After all we have done to save this company, we have been lied to and betrayed by the top executives for years, they company wanted and got a five year contract, now they don’t want to work within the contract they pushed for, now they are refusing to pay the health and welfare benefits that are owed per the contract and they want to blame us, the very people that have kept this company alive while the executives have done nothing but plunder and pillage what used to be a great company. I don’t want this company to collapse, but there’s nothing left to give.