"I'm more excited about the supply chain enabler side of it, that's actually building some of that tech to help brokers get more efficient, help shippers get more efficient, and help carriers get more efficient."
Yellow Corp. Bankruptcy Sparks Controversy and Calls for Probe
The paths differ greatly for Yellow Corp.'s former executives & workers amid bankruptcy. Among the controversy is the Teamsters' call for action.
Editor's Note: This article has been updated for greater clarity regarding the positions and career trajectories of certain Yellow Logistics personnel. We apologize for any earlier confusion.
As the dust of bankruptcy surrounds the once-mighty Yellow Corp., the journey of its former executives and the challenges faced by its workforce provide a stark contrast in career trajectories.
Career Progression Post-Yellow: Former Yellow Logistics personnel like Rick Loerke and Nathan Ragner have moved forward in their careers after the company's challenges. The two have since joined Wisconsin's Valley Companies, contributing their expertise to Valley's expedited and project management services. Meanwhile, Steve McCleary and Ryan Stroup have started afresh, opening a Radiant Logistics location in Overland Park.
Exec Bonus Controversy: Amidst the corporate reshuffling, Yellow Corp. has come under scrutiny for distributing around $4.6 million in bonuses to its top executives just before declaring bankruptcy. This move, which coincided with 30,000 workers losing their jobs, has raised eyebrows and stirred debate around corporate ethics.
Sean O’Brien, the general president of the International Brotherhood of Teamsters, lambasted the trucking company for its decision. He emphasized that Congressional reforms must address such bonuses. In his words, these are reforms “that workers in this country desperately need.” O'Brien's criticism took a pointed tone when he highlighted that Yellow made these bonus payments even while forgoing payments meant for employee benefits.
Since a 2005 Congressional mandate prohibiting bonuses during a Chapter 11 bankruptcy, companies have awarded bonuses before bankruptcy filings. In 2021, after 200 executives got $165 million in pre-bankruptcy bonuses, the Government Accountability Office sought tighter oversight.
Workers vs. Executives: While bonus-laden executives have found new avenues, the average Yellow employee stands at a crossroads. Sen. Amy Klobuchar underscores the plight of the roughly 30,000 workers, emphasizing the bankruptcy's repercussions on livelihoods, health benefits, and pensions. The Teamsters, having sacrificed over $5 billion in wages and benefits since 2009 to support Yellow, now call for an in-depth investigation into the rapid proceedings of the bankruptcy.
Yellow's Assets: Despite its financial struggles, Yellow's liquidation has drawn interest from rivals and lenders. Apollo Global's financing offer was surpassed by Citadel and MFN Partners. Estes and Old Dominion vied for Yellow's terminals, with Estes bidding $1.525 billion.
Yellow Corp.'s unfolding story serves as a stark reminder of the disparities that can arise in corporate landscapes, and we will have to wait and see how this case impacts the business world at large.