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The International Brotherhood of Teamsters on Tuesday called for changes to U.S. bankruptcy laws following the chapter 11 filing of freight trucking company Yellow Corp (YELL.O), saying that workers must not be "left behind" when big businesses fail, Reuters reported. The Teamsters union said that 22,000 of its members were out of work despite making significant concessions on wages and pension benefits in labor negotiations with the nearly 100-year-old company, which filed for bankruptcy on Sunday. Yellow has blamed the Teamsters' opposition to its internal reorganization efforts for its collapse. But the Teamsters said its members had sacrificed more than $5 billion in wage and benefit concessions since 2009 to keep Yellow moving. The union warned that the bankruptcy could mean they will not receive bargained-for retirement benefits or severance pay. The union argued that U.S. bankruptcy law should be reformed to protect collecting bargaining agreements and worker retirement plans, which can be terminated by a bankrupt company or by a new buyer who acquires a company out of bankruptcy.

The collapse of one of America’s largest trucking companies is reverberating across the economy, from domestic shipping and real-estate markets to Wall Street, WSJ Pro Bankruptcy reported. Yellow was a $5.2 billion business as recently as last year when it moved around 50,000 shipments a day in a trucking network that made it a fundamental part of the supply chains of hundreds of U.S. companies. The rapid wind-down of its business last month, capped by the shutdown of all operations and a bankruptcy filing in recent days, is leaving behind a trail of winners and losers as the 99-year-old trucker disappears from the highways. The most immediate winners are Yellow’s competitors in the less-than-truckload sector, known as LTL, a segment of the trucking industry that acts as a kind of circulatory system for the goods economy by having trucks carry cargo for multiple customers on the same trailer in fast-paced distribution networks. The clearest losers in Yellow’s demise are the company’s workers, who were laid off, dismissed and locked out of closed terminals and offices last month as the trucker wound down its business. The loss of some 30,000 jobs is the largest at a single company since Boeing at the end of 2020 announced it would cut its workforce by around 30,000 jobs, according to Challenger, Gray & Christmas, an outplacement services firm.

The United Auto Workers union is pressing the Detroit car companies to give its factory workers a 40% pay hike in the next labor contract, an increase that would be the largest in recent memory, the Wall Street Journal reported. The union conveyed this demand to the automakers this week, along with a list of other items it plans to push for at the bargaining table. The UAW is negotiating new four-year labor agreements for about 150,000 hourly workers at General Motors, Ford Motor and Jeep-maker Stellantis. Currently, unionized factory workers at the Detroit car companies start at about $18 an hour. The top wage, achieved over a period of years, is about $32 an hour. The 40% pay hike would be a general increase over the life of the next four-year contract. It would be broken up into a 20% increase upon the contract’s ratification, and four additional 5% wage increases given each year.

The collapse of trucking giant Yellow Corp. casts doubt on whether the U.S. government will be able to fully recoup a controversial $700 million loan for an enterprise that was already in financial trouble before the Treasury threw it a COVID lifeline, Bloomberg News reported. The Nashville-based company may be forced to file for bankruptcy soon, after having told workers on Monday that it was shutting down. The decision punctuates the company’s struggle to refinance more than $1 billion of debt maturing in 2024 — almost half of which is held by the government. Now, it’s unclear how much the Treasury Department, which issued the loan in 2020 under the Trump administration, can expect to get back. The government and its agent for the loan, Bank of New York Mellon, may have to fight other creditors in court for whatever assets Yellow has left. Among the other creditors: private equity titan Apollo Global Management Inc., which in 2019 was the lead lender on a $600 million term loan for the company, known at the time as YRC Worldwide Inc.

Western Global Airlines LLC has reached a deal with creditors that would allow the cargo carrier to keep operating while it reworks its debt load in a potential bankruptcy, Bloomberg News reported. The distressed carrier has lined up $77.3 million of bankruptcy financing at a rate of 9% over the Secured Overnight Financing Rate to fund the company’s operations while in chapter 11 protection. The cargo airline is expected to seek court protection from creditors in the coming days. The deal includes a roll-up of debt held by founder and Chief Executive Officer Jim Neff while other creditors, including bondholders, will provide about 50% of the financing. It also puts Neff in position to retain control of the company following its emergence from bankruptcy. The airline has been considering options including a bankruptcy filing to address its debt load while facing dwindling liquidity for months, as Bloomberg previously reported.

Shares of indebted trucker Yellow have risen fivefold this week, defying its recent shutdown of operations and impending bankruptcy filing, WSJ Pro Bankruptcy reported. Yellow stock closed yesterday at $3.90, more than doubling for the second day in a row. Some investors were struggling to understand the stock rally, which suggested that buyers see value in Yellow’s equity even as it nears a bankruptcy filing and freight customers take their business elsewhere. Equity ranks junior to debt in bankruptcy and holders typically recover nothing unless creditors are fully paid with a surplus of value left over. Shareholders of bankrupt companies are rarely in the money — usually when the business gets an unexpected boost that restores its solvency. That isn’t likely to happen for Yellow, which faces long odds to exit bankruptcy as a going concern because of the nature of the trucking business. Its customers would be long gone, afraid of leaving their inventory stranded in court proceedings. Yet now that customers have fled, Yellow could be more valuable in some respects in liquidation than as an ongoing operation, in large part because of its real estate and other holdings, said people familiar with the situation.

U.S. employers posted fewer jobs in June, a sign that the red-hot demand for workers that has been a key feature of the post-pandemic economy is cooling a bit, the Associated Press reported. Job openings dropped to 9.6 million in June, the Labor Department said yesterday, down slightly from the previous month but much lower than the 10.3 million in April and the fewest in more than two years. The government’s report also showed that the number of people who quit their jobs in June fell sharply to 3.8 million, from 4.1 million, another sign the job market is slowing. The Federal Reserve is seeking to cool hiring because if companies are less desperate to add workers, and fewer people are quitting to seek higher-paying positions elsewhere, then businesses will be under less pressure to raise pay to find and keep workers.

White House economic adviser Jared Bernstein on Monday said the reported impending bankruptcy of cash-strapped U.S. trucking company Yellow Corp does not indicate an economy-wide problem, Reuters reported. The company, through a string of mergers, appeared to take on more debt than it could handle, Jared Bernstein of the Council of Economic Advisers, said in an interview with CNBC. "So I think that this looks like more of a Yellow story than an economy-wide one by a long shot," Bernstein said. Yellow Corp has ceased operations and is filing for bankruptcy after failing to reorganize and refinance over a billion dollars in debt, the Teamsters Union said on Sunday. Earlier this month, Yellow averted a threatened strike by 22,000 Teamsters-represented workers and last week said it was exploring opportunities to divest its third-party logistics company.

Yellow, the beleaguered trucking company that received a $700 million pandemic loan from the federal government, notified staff on Friday that it is shutting down and laying off employees at all of its locations, the New York Times reported. The move comes ahead of an expected bankruptcy filing by Yellow in the coming days. The closure of the company would mean the loss of approximately 30,000 jobs and mark the end of a business that just three years ago was deemed so critical to the nation’s supply chains that it warranted a federal bailout. “The company is shutting down its regular operations on July 28, 2023, closing and/or laying off employees at all of its locations, including yours,” the company said. Yellow has been locked in protracted labor negotiations with International Brotherhood of Teamsters over a new contract that the company has said is essential to its ability to move forward with a restructuring plan. As of the end of March, Yellow’s outstanding debt was $1.5 billion, including about $730 million that is owed to the federal government. Yellow has paid approximately $66 million in interest on the loan, but it has repaid just $230 of the principal owed on the loan, which comes due next year. Yellow is one of the largest freight trucking companies in the United States, and its downfall could have a ripple effect across the nation’s supply chain. Its impending bankruptcy comes days after United Parcel Service reached an agreement with the union representing more than 325,000 of its U.S. workers, averting a strike. Yellow’s management and union negotiators have been trying to reach an agreement over wages and other benefits but failed to clinch a deal. The fate of Yellow’s assets is not yet clear. In 2020, the Trump administration, which had ties to the company and its executives, agreed to give the firm a pandemic relief loan in exchange for the federal government assuming a 30 percent equity stake in the company.