Yellow Corp., which until recently had its global headquarters in Overland Park, halted operations Sunday and has begun laying off all 30,000 of its employees, according to the union representing most of those workers.
Created in 1924, the company was one of the oldest and biggest U.S. trucking businesses but is now preparing to file for bankruptcy, which could have substantial effects on the nation’s supply chain and result in rising costs to consumers.
It also will impact the company’s remaining Overland Park workforce of nearly 1,000 employees, according to the Kansas City Business Journal.
Union leaders say company is shutting down
The Teamsters union, which represents about 22,000 of the company’s workers, confirmed Monday that it had been notified of the company’s operations being shuttered.
Teamsters General President Sean M. O’Brien called it a “sad day” for workers and the American freight industry.
“Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” O’Brien said in a statement.
Yellow officials did not respond to the Post’s requests for comment Monday. Some executives who were reached directly redirected inquiries to phone numbers and emails that went unanswered.
Yellow still employs nearly 1,000 at JoCo offices
The company made plans to leave its former Overland Park offices at 10990 Roe Ave. in June 2021 and moved to Nashville, Tennessee.
At the same time, Yellow made arrangements to lease office space at Aspiria, the remade former Sprint campus at 119th and Nall.
That office space housed many of the nearly 1,000 remaining Yellow employees in the Kansas City metro.
Company’s website has changed
The company’s website was updated Monday with new links directing employees to log in to gain updates on what was transpiring.
Former employees confirmed to the Post that information on the company website indicated anyone with nine or fewer years of service at the company would receive two weeks of severance pay, while executives and company leaders were guaranteed 13 weeks of pay.
All links to career openings had been wiped as of Monday, and there were zero available positions listed.
Concerned customers with questions about active shipments can now see a message at the top of Yellow’s website, directing them how to find information on the status of their freight.
As of Monday afternoon, a customer service phone number was still active and continuing to update customers on the status of their shipments.
Yellow just narrowly avoided a Teamsters strike
Whispers of a potential bankruptcy began growing louder in recent weeks.
The company had been battling with the Teamsters union, which canceled a threatened strike last week.
The union agreed to give Yellow an extra month to find enough money to make payments towards employees pension and health insurance plans.
Word then came from customers that the company had stopped picking up freight and was only completing deliveries of freight already in its system.
Initially, the company sent out internal memos attributing the shipping issues to the looming strike: “The threat of a strike …led to catastrophic shipment declines. As a result …we are limiting pick-up operations.”
By Friday, the company was announcing the sale of Yellow Logistics, Inc, its independent third party logistics organization.
Multiple news outlets began reporting that the company was on the verge of bankruptcy, and operations could be shut down by the end of the business day Friday.
Yellow received a $700M pandemic relief loan
This all comes after Yellow had received a $700 million loan from the federal government in 2020 at the height of the pandemic.
Lawmakers had designated a portion of the $2.2 trillion CARES Act for companies designated as critical to national security maintenance.
The company had just reported losses of over $100 million in 2019 and was becoming burdened with growing debt.
In return for the loan, the U.S. Treasury received nearly 16 million shares of Yellow stock, making it the company’s largest shareholder with nearly 30% of its outstanding shares.
The company still owes the Treasury Department more than $700 million, according to its most recent quarterly report.
At the end of last year, Yellow had outstanding debt of $1.6 billion.
Ben McCarthy is a contributor to the Post and other publications in the Kansas City area. He can be reached at [email protected] with questions, comments and story suggestions.
