(Reuters) – U.S. trucking company Yellow dodged a strike threat by 22,000 Teamsters-represented workers on Sunday, saying the company would pay the more than $50 million it owed in benefits and pension accruals.
“The central states agreement at the request of the Teamsters gives Yellow 30 days to pay its bills, with the understanding that the company will do so within the next two weeks,” the Teamsters union said Sunday.
Yellow is the third largest U.S. trucking company specializing in the LTL segment that combines shipments from different customers into the same trailer.
Its customers include major retailers like Walmart and Home Depot, manufacturers and Uber Freight, some of which have suspended freight shipments to the company for fear that such goods could be lost or stranded if the carrier goes bankrupt.
Competitors, who are grappling with a sharp drop in freight volume, are expected to pick the company’s customers, trucking experts and analysts said.
In 2020, then-US President Donald Trump bailed out the company with a $700 million pandemic relief loan. In exchange, the federal government took a 30% stake in Yellow.
The Nashville, Tennessee-based company, formerly known as YRC Worldwide, has not meaningfully repaid the loan, which is part of a $1.2 billion debt that it is working to refinance before it matures next year. Yellow’s other lenders include a group led by Apollo Global Management.
Company executives have appealed to the International Brotherhood of Teamsters to help them cut expenses as cash dwindles. He has successfully won such concessions in the past, but this time was rebuffed by new Teamsters general chairman Sean O’Brien.
“After years of worker returns, federal loans and other bailouts, this dishonest company has only to blame itself for being in this embarrassing position,” O’Brien said in a statement last week.
O’Brien also conducts negotiations involving approximately 340,000 US employees at United Parcel Service.
A federal judge in Kansas on Friday denied Yellow’s request to stop the Teamsters from striking over overdue benefit payments.
(Reporting by Lisa Baertlein in Los Angeles and Ananta Agarwal and Mrinmay Dey in Bengaluru; Editing by Diane Craft and Chris Reese)