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
More FreightWaves articles by Todd Maiden
- Prologis beats Q2 expectations, lowers rent growth forecast
- Strike risk rises as Yellow punts on more than $50M in required contributions
- Q2 likely ‘peak pain’ for trucking companies, Morgan Stanley says
Tina Negri
my husband worked for YCR now for 25 yrs in Indianapolis. its a shame that after 25 yrs they just kick ppl out on the street with no money and now i have to buy my insurance. How can i expect to pay for insurance without a job??? and they didnt give the 72 hr notice that the doors where closing until last monday. my husband is 60 yrs old. and he has found out that he no longer has a job. how are we expected to live without money to pay bills and buy food? this is a shame. i just dont understand it. what are we suppose to do? why isnt Teamsters helping the unemployed . its a shame how they can kick you out with absolutely Nothing.
will YCR/Teamsters help pay my insurance for my family? and buy food for my family. this happened to my wife. she worked for GM UAW. but they paid her for a limited time and she still had insurance. My husbands boss died after hearing the news. He had planned on retiring soon. so sad. we have to go to his funeral today. we will lose out home. and health insurance. can some one please tell me if my husband can retire ? hes 60yrs old. its gonna be hard for him to find a job at his age. i dont know what we are gonna do.
Donna Kasper
I’m a Holland Clerical/customer service/OSD worker for 23 years. Teamster for 28 total. After all of that my pension is currently worth 1163.00. Per month Can someone explain to me how I can survive on 280.00 per week? Also per central states I can only work another job 20 hours per month. So not only are they literally throwing me out on the street. It is oppressive to limit my hours/money after giving so many years of my life. It’s a sad situation.
Grocery Teamster Driver
YRC is a Zombie company which 20 years ago Yellow and Big R (Roadway) were the ticket. I believe they are looking for the graceful out to blame on the Teamsters even though the pay is sub standard there now Union or Non-union and grossly miss managed at the company’s executive and board level. Sad to see such a great company ran into the ground. I believe that this is R.I.P. for them especially in this freight market and economy.
Harold
Look at T force and abt force pays 4 dollars an hour more than yellow and 100 percent in retirement to yellow 25 percent and has done it 15 years.I know As a yellow employee Talking to the other truck drivers I’m running a bigger area and I’ll take out more freight in them it’s your management there’s a problem myself I think it’s Darren Hawkins how can you run a business for 15 years and not get it to go up and it just keeps going further and further in debt