Curious Yellow? |

We haven’t talked about the trucking industry or truck drivers for a while. Let’s close that gap today.

One of the big changes that came about during the interim was the demise of one of the trucking firm behemoths, Yellow Freight closed its doors and sent some 30,000 drivers to the unemployment lines. (At the time, Yellow was the third largest less-than-truckload [LTL] carrier in the US.) This failure was the biggest business collapse in the US trucking industry ever.

Given that many of the trucking firms are forever claiming thát there is a truck driver shortage, Yellow’s failure was not a good outcome. (Yellow was generally busy every day of the week- so it’s closing doesn’t flood the marketplace with drivers; it leaves many firms with supply chain deviations.)

When Yellow filed for bankruptcy, its plan was to sell its network of hubs (distribution centers), as well as trucking equipment. The concept was that would leave the secured creditors pretty much whole.

But now- Sara Riggs Amico- has a plan to take over Yellow and return it to operations. She has served as Executive Chairperson for Jack Cooper, a 95 year old family owned business. It does not provide long distance hauling or less-than-truckloads (LTL); no, it is a car hauling venture (to and from dealerships). The venture delivers some 4 million cars a year to a dealership near you. Moreover, they are a progressive firm- for example, they are transitioning to zero emission Class 8 vehicles!

You should also know that Jack Cooper is a company that cares for its staff. Employees are afforded health care, paid leave for new parents (birth, foster, adoption). And they are pro-union! A far cry from how Yellow operated.

Amico has created a team of female executives to manage this venture, which will be separate and apart from Jack Cooper. The management team would control 51% of the new venture,, once they take over Yellow.

Amico’s plan rests on the US Government (Treasury Department) postponing the deadline (until 2026) for payment of the rescue loan Yellow acquired in 2020 ($700 million). The impediment is that this loan was proffered through the CARES Act, which may not let an extension to the loan exist.

Moreover, there is the issue that Yellow plans to pay its creditors off- and soon. (It is not clear that Yellow will be able to sell all its terminals to ensure the cash is available for such a payment. But, Estes Express supposedly has an offer of $ 1.53 billion to take over those distribution centers- and that will pay off the creditors, include a $ 500 million secured loan from Citadel.)

In addition, Amico’s plan includes a $1.1 billion borrow to pay off the other secured creditors and bankruptcy lenders. And, then, there’s the issuance of shares to unsecured creditors ($1.5 billion) – most of which will go the Central States Pension Fund (this pension plan was shafted by Yellow- it shortchanged required payments and then filed for bankruptcy). The pension fund won’t be made whole in the takeover plan- it will only receive $500 million of the preferred shares under Amico’s plan. That is a far cry from the pension debt Yellow left- $ 4.8 billion. Another impediment- ERISA (Employee Retirement Income Security Act) is not a fan of a union owning securities- but it could grant an exemption.

But, it is a crucial advantage to the US economy to do so. The plan is to bring back half of the 30,000 terminated employees (working with the unions) to ensure that supply chains are maintained. (About 10,000 of the former employees are already employed elsewhere.)

On the plus side, Amico has already restructured several Teamster trucking companies- Jack Cooper acquired two auto-hauling ventures and successfully integrated them into their firm. And the Teamsters (as well as many members of Congress) support her plan.

Let’s hope some provisions are adjusted to allow the resurrection of this trucking firm.