Yellow Corp shut down today

[Rmay635703]

Well. they borrowed a TREMENDOUS amount of money & bought a bunch of their "competitors"-the bill is coming due...

Yellow freight and Apollo Global Management: What are workers up against?

Yellow’s main investor is Apollo Global Management, a company known for forcing massive cuts to pay and jobs.

www.wsws.org

If Apollo gets involved you know the place is going to
Stop paying pensions
Stop paying healthcare
Cut wages
Then finally fire its workforce and fail.

Yellow (the company) was used for legal usupery to be a personal piggy bank so the big wig and friends could take out loans he would never have to repay .

Sadly legal usurpury (made legal in the 80’s - the act of using a company to take on a loan to give yourself money you never intend on repaying)
Has become basic operating procedure for companies across the nation whereby an incompetent leadership takes over (usually one of the big 5, Sun Capital, KKR, blackstone, Apollo, etc but not always ) and they basically try to get as many loans as possible to put the money in their pockets, never caring about actually competently leading the company.

It’s extremely unfortunate something that was functionally illegal in the past has become embraced as some sort of amazing breakthrough.

If you want to see people actually have to run a company to succeed we would need to go back to the framework that existed in the 50’s and 60’s that ensured you were viewed as a clown if you did a leveraged buyout or in prison if you committed usurpury. Both of which formerly would be death in the business world but now are just daily operations.

There are so many zombie companies because of this pervasive practice and the resulting massive influx of incompetent leadership.
Long ago you had to actually be an intelligent competent person to be successful in business and successful in running companies.
Now you just have to be good at financial maneuvering and don’t need to know anything about actually running a business.

 

[SC Maintenance]

The worst part is the non paying in to the pension fund

The worst part is that back wages and promised pension contributions are not the most senior debt. In chapter 7 bankruptcy its usually. creditors (the bank) gets their money first out of any liquidation assets. Its BS, the people working at the company should be paid first - no exceptions. Congress should pass a law, but the bank lobby is too strong. Just another example of who doesn't matter.

 

[mk378]

There are pretty strict laws that hours actually worked must be promptly paid no matter what. Pensions of course are a different matter.

 

[alarmguy]

Companies go out of business and close down, never a pleasentry for a worker. Nothing new there. Trucking is tough, dealing with unions is tougher.
With that said Yellow is still in play, unknowns exist, they are still talking with the union and still may file for bankruptcy which would keep the company running. Something tells me the union will take a deal better for the company to survive.

Time will tell. It's a free market. Its unrealistic for workers to get paid ahead of banks and there is nothing wrong with the banks getting paid first, if they didnt, they wouldnt lend money and those workers would have been out of a job much sooner. We live in a free society, you cant force someone to lend money to companies. *LOL* By the way, banks have employees too.

 

[SC Maintenance]

There are pretty strict laws that hours actually worked must be promptly paid no matter what. Pensions of course are a different matter.

Unfortunately this is not true. Perhaps you have a state law - which is good, however I am not sure how they would make a state law over-ride federal bankruptcy laws. Possibly if that business only does business in that state? I am not a lawyer so would be happy to have someone clarify.

Federal laws are not that way. I know someone who went through it.

Here is a quick link from a lawyer in CA, but I am sure you can find other examples.

"Unfortunately, wages are forth on the list of debts to be paid after a business files for bankruptcy, both in cases of Chapter 11 and Chapter 7 bankruptcy. According to 11 U.S. Code § 507 – Priorities, the order of priority for debts to be repaid is as follows:

• Domestic support obligations;
• Administrative expenses;
• Claims in an involuntary bankruptcy petition;
• Employee wages;
• Contributions to benefits plans;"

https://www.garciagurney.com/blog/will-i-still-get-paid-if-my-company-files-for-bankruptcy/

Chapter 11 its not required either, but usually they need people to stay while the re-org so they petition the judge to keep paying. Chapter 7 (liquidation) forget it - employees almost always get zilch including back wages.

If you ever work somewhere and they miss a paycheck - don't believe them. Start taking all your sick and vacation time and stay home and search for another job.

 

[repairman54]

If you work for a company that is on the ''skids'' you know what's going on well in advance of the last day if you choose to face the truth.
I retired from Sears just before the end, had to hang in for making it to 65 holding my nose for the last couple years.

 

[wag123]

Its unrealistic for workers to get paid ahead of banks and there is nothing wrong with the banks getting paid first, if they didnt, they wouldnt lend money and those workers would have been out of a job much sooner. We live in a free society, you cant force someone to lend money to companies. *LOL* By the way, banks have employees too.

I strongly disagree with you on this. Employees should always be paid first and promptly for work already done. I believe that this is federal law. Everyone else gets paid afterwords, period. Without the employees there wouldn't be a company to loan money to. Furthermore, there is always an element of risk when giving a loan and part of that risk is acknowledgement by the lender that they are further down the pecking order when being paid back. Besides the employees, the government is going to get theirs before the lenders get anything.

 

[alarmguy]

I strongly disagree with you on this. Employees should always be paid first and promptly for work already done. I believe that this is federal law. Everyone else gets paid afterwords, period. Without the employees there wouldn't be a company to loan money to. Furthermore, there is always an element of risk when giving a loan and part of that risk is acknowledgement by the lender that they are further down the pecking order when being paid back. Besides the employees, the government is going to get theirs before the lenders get anything.

IF the employees were paid first they would never have jobs because no bank will lend money to run or start a business and that is certainly in their right. So we wouldnt have to worry about employees not getting paid because there would never be a business with employees to start with.
You got it backwards, without banks there would be no company.
One other thing you threw in there that was not in my post. No one said employees will not get paid for work performed. You can update once the dust settles to let us know if that happened.

Update, I see I am wrong and I posted my intentions wrong. Yes, workers should and will get paid for the hours worked. But will lose everything else possibly... my mistake you are correct. The pay is a pittance to what is owed.

 

[wag123]

IF the employees were paid first they would never have jobs because no bank will lend money to run or start a business and that is certainly in their right. So we wouldnt have to worry about employees not getting paid because there would never be a business with employees to start with.
You got it backwards, without banks there would be no company.
One other thing you threw in there that was not in my post. No one said employees will not get paid for work performed.

If a business can't afford to pay their employees, as required by law, they shouldn't be in business to begin with and nobody should lend them money. Would you have gone to work if they weren't paying you? I didn't think so.

 

[Dave Hess]

I strongly disagree with you on this. Employees should always be paid first and promptly for work already done. I believe that this is federal law. Everyone else gets paid afterwords, period. Without the employees there wouldn't be a company to loan money to. Furthermore, there is always an element of risk when giving a loan and part of that risk is acknowledgement by the lender that they are further down the pecking order when being paid back. Besides the employees, the government is going to get theirs before the lenders get anything.

ToysRUs executives got their $$$ and many hourly store employees didn’t get their last paycheck.

 

[alarmguy]

If a business can't afford to pay their employees, as required by law, they shouldn't be in business to begin with and nobody should lend them money. Would you have gone to work if they weren't paying you? I didn't think so.

(read my post above) With that said, the rest is just a fact of life, no one says life is fair but it is actually fair, working for someone carries risk as working for yourself carries risk. I mean, its life.

 

[SC Maintenance]

Its unrealistic for workers to get paid ahead of banks and there is nothing wrong with the banks getting paid first,

This is untrue because its uneven playfield. I have worked my entire career for companies that supply only to other businesses, mostly on credit. We have all kinds of levers. We can check their credit at any time. We can contact their other suppliers to see if there paying on time - its in the credit agreement they sign when they set up terms. We provide product they require so we can simply stop shipment and demand COD - meaning they get to shut down that day because there out of material unless they pay me first. Banks are the same - they looked at the risk up front and decided to lend.

Can you imagine an employee demanding credit references or contacts at their top 3 suppliers to ensure they would be paid for their work? Can you imagine a employee demanding COD for the upcoming week or not showing up to work.

Yes, there would be no business without capital, but there would be none without employees either. At best case they should be equal with the secured creditors - meaning whatever is left is spread around as a percentage of what is owed.

Your not thinking this through I don't think.

 

[alarmguy]

ToysRUs executives got their $$$ and many hourly store employees didn’t get their last paycheck.

They did get paid and not only that but employees there for 1 year or longer got severance. The whole "pay" thing is media non sense in most cases, here we are, in a forum discussing how this trucking company is going to cheat its employees and it didnt happen. Makes dramatic headlines with agenda driven groups.
Forget the severance story though, all employees got paid for hours worked.

30,000 Toys R Us workers were laid off without severance. Now its owners are paying up.

The owners of the defunct toy chain have agreed to give out $20 million to laid-off employees.

www.vox.com

 

[SevenBizzos]

Our local hub will still operate with a new carrier. I don't know who or where those people are coming from yet.

 

[Dave Hess]

I feel if someone worked the final week of a business, the employee should receive 100% of their final paycheck.

It would also be nice to be paid for any unused PTO….. but that’s highly unlikely.

 

[SC Maintenance]

I feel if someone worked the final week of a business, the employee should receive 100% of their final paycheck.

It would also be nice to be paid for any unused PTO….. but that’s highly unlikely.

If they have declared chapter 7 then I think its out of their hands - it falls to a judge once they file. If they were a decent company employee's would have had pay direct deposited as the companies last act.

 

[NormanBuntz]

It's a shame. I have a retired friend who was a supervisor for several years at Yellow's Richmond, VA terminal. Makes you wonder how Old Dominion Freight Lines has exploded in recent years, while Yellow headed to bankruptcy.

 

[Pew]

Yellow freight and Apollo Global Management: What are workers up against?

Yellow’s main investor is Apollo Global Management, a company known for forcing massive cuts to pay and jobs.

www.wsws.org

If Apollo gets involved you know the place is going to
Stop paying pensions
Stop paying healthcare
Cut wages
Then finally fire its workforce and fail.

Yellow (the company) was used for legal usupery to be a personal piggy bank so the big wig and friends could take out loans he would never have to repay .

Sadly legal usurpury (made legal in the 80’s - the act of using a company to take on a loan to give yourself money you never intend on repaying)
Has become basic operating procedure for companies across the nation whereby an incompetent leadership takes over (usually one of the big 5, Sun Capital, KKR, blackstone, Apollo, etc but not always ) and they basically try to get as many loans as possible to put the money in their pockets, never caring about actually competently leading the company.

It’s extremely unfortunate something that was functionally illegal in the past has become embraced as some sort of amazing breakthrough.

If you want to see people actually have to run a company to succeed we would need to go back to the framework that existed in the 50’s and 60’s that ensured you were viewed as a clown if you did a leveraged buyout or in prison if you committed usurpury. Both of which formerly would be death in the business world but now are just daily operations.

There are so many zombie companies because of this pervasive practice and the resulting massive influx of incompetent leadership.
Long ago you had to actually be an intelligent competent person to be successful in business and successful in running companies.
Now you just have to be good at financial maneuvering and don’t need to know anything about actually running a business.

I'm surprised Yellow's execs aren't hanging off a tree right now. I'd turn the other cheek if that happened.

 

[Cujet]

I used Yellow a good number of times in the past. Shipping the Helicopter dolly or helicopter blades, before I had a way to move them myself. Their prices were always reasonable for us. About $2,200 to move a 2500# dolly from FL to CA. Or about $600 to move a helicopter blade box from FL to TX. Never an issue.

However, in their union only the electrician could plug in the table lamp and the driver could not help with a helicopter blade box. Something that could be lifted by two guys. The blades weigh about 33 pounds, and the box is not particularly heavy, and it's easy due to handles. Just long.

 

[fdcg27]

It appears from a quick google that wages owed to employees have priority over unsecured debts.
I have no idea how much of Yellow's debt is unsecured, but I would think that lenders have significant exposure.
Also, even secured debt is only secured by the collateral offered and collateral values may well be significantly less than the debt owed, just like someone being upside down in a car loan or a mortgage.
A shame that in an economy critically short of logistics capacity a truck line cannot survive.
Sounds like bad and maybe kleptocratic management to me.