From the WSJ Article
The Teamsters union is threatening a strike against trucking giant Yellow after the company missed healthcare and pension payments, putting fresh pressure on one of the country’s biggest trucking companies as the carrier seeks to avoid bankruptcy.
And a few weeks ago from the NYTimes
As paper markets (stocks, bonds even crypto) move higher and higher the actual underlying economy is not.
If the real economy is moving sideways, well, sideways is not bad.
But if that happens while the stock market, bond market, real estate market, insurance market, university endowments etc. etc. spiral upward that is disturbing.
All a strike will accomplish is ensure that Yellow goes into bankruptcy. If they strike, they can save time by filling out their unemployment application first.
The entire company stock is worth only $54.5 million, having been “delisted” in 2004.
It now trades about $1.05/share on the “NASDAQ National Market” (formerly known as OTC.)
It lost 11-cents per share, not bad considering that it lost $3.13/share in 2019 before the pandemic
During the Pandemic it got a $700 million bailout.
It needs to refinance $1.2 billion in loans that come due next year.
The missed payments for the two months total more than $50 million.
I don’t know what went wrong with the company but it has been in trouble 20 years or more and is not likely to survive the Bidenomics economy. The threatened strike certainly is not what caused its problems.
More to the point threatening a strike seems like a better response than
“Go ahead you and the creditors work out whatever you like. We trust you and the creditors will give us a fair deal.”
Can’t get blood from a stone as they say.
I think what they are doing is making sure that the company does not make an agreement with the creditors that cuts them out of the picture.
They are letting both mamgt and creditors know “If you drive too hard a bargain with us you’ll get an inoperable shell of a business’ and we’ll drive somewhere else. The labor market is tight. We can work anywhere. So work it out amongst yourselves. Don’t send us the bill. There are still 1.5 jobs openings per worker.”
A strike really won’t help them at all when it comes time for the Bankruptcy Court to dole out the pieces of the corpse. It will just get everybody TO Bankruptcy Court faster.
The downside of this is that there will likely be more Not-So-Swift drivers on the road.
Oh, it’s one of those zombie companies created after the '08 recession.
Not a big loss. It needs to go anyhow.
Meh
There is a trucker shortage and their pensions were funded into a third party until now. The have zero reason to work for less-than-market wages, which are right now, high. Every last trucker will be employed again within a week.
The company has (gross) $2.3b in assets $1.2 b in loans and $1.4b in other liabilities (negative $400m net worth.) The drivers have no reason to give up one dime of that.
As I said there is a trucker shortage. They will all be working again within a week, retaining their previous pensions because those were paid-out to and are held-by a third party. Neither the stock-holders, nor the mangers, nor the creditors can make an equivalent statement.
It still will give them NOTHING beyond what they already had.
Here’s my only question; did the CEO pay the company’s debts before he paid himself?
I suppose we should celebrate. This was a ‘zombie’ company, and the cleanout of such dead wood is necessary for the economy to finally start to bloom again.
I am not opposed to that. But it would be a lot easier to agree if I cold put my finger on something tangibly stupid about the company, its leadership, its stock price or whatever
When bad policy causes artificial boom-bust, the companies that go bust are sometimes the stupid ones, and sometimes just random ones.
It’s been in trouble for a long time due to debt load.
Once interest rates increased, that firm was going to fold. It’s about time.
We should learn a lesson and stop bailing out businesses like this. Unfortunately, all that will happen is Trump gets scapegoated, and the bailouts will keep coming.
Sounds right.
When I lived on Long Island, one small area (5-mile radius) was being served by by approx 3 supermarkets when I arrived, and had approx 10 including 2 recently-closed when I left a decade later. (the population did NOT increase it banana consumption 400%.) Several have closed since then.
Naturally, the local media used it as an example of the “free market” causing harmful economic cycles.
