Corporate mismanagement destroys 30,000 jobs

By Ronan Foley
Boston, MA

Following years of financial crisis—and despite a $729 million taxpayer bailout from President Trump in 2020—Yellow Trucking has shut down and filed for Chapter 11 bankruptcy. The nearly 30,000 employees of Yellow, including 22,000 members of the International Brotherhood of Teamsters (IBT), have all been laid off. The labor movement and Teamsters need to campaign for the company to be taken under public ownership and democratically run to save jobs, protect union rights in the logistics industry, and provide vital services.

Chapter 11 bankruptcy allows for the “restructuring” and “rebirth” of the company, similar to GM and Chrysler in 2008-2009, potentially with far fewer union jobs or more concessions from the union workforce. The smaller customer shipment or “Less-Than-Load” (LTL)” trucking industry, which includes Yellow, has seen a sharp decline in union density in recent decades. 

In the weeks leading up to the shut down, Yellow failed to pay into workers’ pensions and attempted to close terminals and implement wage cuts in their “One Yellow” restructuring initiative. The IBT issued a strike notification in July in response. The union unfortunately called off the potential strike after Yellow agreed to pay the $50 million it owed to workers within 30 days. Days later, the company declared bankruptcy. Yellow claims it will pay all debts by selling assets. Workers should be paid first and public funds returned before any big creditors get paid. 

Yellow CEO Darren Hawkins (average salary $1.27 million) is trying to blame the Teamsters for the company’s downfall yet Yellow spent over $3 billion acquiring competitors in recent years despite receiving bailout funds. Yellow had already used years of financial turmoil to scam concession after concession from union workers including a 15% wage cut in 2009.

The loss of these jobs is a damning indictment of the union leadership’s strategy. Despite leadership accepting concessions and sacrificing members’ livelihoods to keep the company afloat, the jobs have been lost anyway. The union missed an opportunity to coordinate the potential strike at Yellow with the strike votes this summer at ABF and TForce, the two other unionized LTL companies. Big victories at those three companies could have forced Yellow to trim the fat at the top and, most importantly, could have been a launching point for a campaign to re-unionize LTL trucking.

Yellow is a clear demonstration that private ownership and mismanagement in the pursuit of profit hurts the working class. Companies like Yellow and the freight railroads have raked in massive short-term profits at the expense of working conditions, jobs, and living standards. These result in “leaner”, but not better, operations. Recent global disruptions emphasize the importance of reliable supply chains to ensure access to food, fuel, and goods. 

Yellow is one of many examples showing that simply handing over tax dollars to corporations doesn’t save jobs. Companies routinely use corporate welfare for stock buybacks and executive bonuses instead of job creation, improved pay and benefits, or even fixing service issues. Bailout money should go to workers’ pockets first and public funds should be repaid before any executive bonuses or shareholder dividends.

Considering Yellow’s scale of operations, its vital role in the economy, the large tax-funded bailouts, and its large workforce, Yellow should be nationalized, which would help save 30,000 people from unemployment. Yellow is already 31% owned by the U.S. Treasury Department as part of the 2020 bailout loan deal. 

We need a logistics industry run to meet the public need, not run for profit. It won’t be enough for the government to simply have 100% ownership over Yellow or to operate it like another bureaucratic department. The company should be under democratic control by the workforce so funds can be used and operational decisions made to improve service to meet needs rather than generate short-term profit. Workers know the work better than executives and shareholders. People who rely on their jobs to survive have a much greater incentive to protect them through long-term planning than corporate cost-cutters.

IBT leadership, and most importantly rank-and-file members, should lead the charge in calling for the nationalization of Yellow, including helping build an independent workers’ party willing to campaign for public ownership. Publicly-owned logistics companies could cooperate to create more efficient, safer, and environmentally-friendly supply chains by removing the profit motive and making decisions based on public need.