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Yellow | Bid from car hauler to revive defunct Yellow has shippers skeptical

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Bid from car hauler to revive defunct Yellow has shippers skeptical​

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Bids for the 170 terminals owned by Yellow are due Thursday with a final auction set for Nov. 28, leaving little time for another bid for the company’s assets. Photo credit: Turkey23 News.

William B. Cassidy, Senior Editor | Nov 9, 2023, 4:58 PM EST

As bids for Yellow’s 170 terminals come due Thursday, a potential bid for all of the failed trucking provider’s assets from a unionized truckload car hauler is rattling the US less-than-truckload (LTL) market.

The prospects for Jack Cooper Transport’s plan to acquire Yellow’s assets and rehire Teamster employees remain unclear, but it’s apparent the plan won’t have an immediate or short-term impact on an LTL trucking market that has moved beyond Yellow, which shut down July 30.

When asked whether they would return to a revived Yellow, shippers expressed a wait-and-see attitude, at best. “Heck no,” was the response of one large LTL shipper, who then said he would have to see how a new Yellow performed in the marketplace. And that would take time.

Time is something Jack Cooper Transport and its ally, the International Brotherhood of Teamsters, only have in short supply. After Thursday’s deadline for bids, the auction of Yellow’s terminals — its trucks and trailers will be sold separately by liquidators — is scheduled for Nov. 28.

Winning bids will be announced in December, with the $1.525 billion “stalking horse” bid from Estes Express Lines setting the floor for bidding in the auction. Strong demand is expected to drive the final value of Yellow’s network, which includes large and small facilities, above $2 billion.
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Jack Cooper Transport has been working behind the scenes with the Teamsters for months to offer an alternative to liquidation and a piecemeal auction of Yellow’s terminals. Reuters reported Oct. 30 that Jack Cooper Transport planned a “going concern bid” to rescue Yellow and 22,000 Teamster jobs.


A source close to the negotiations said the potential bid would be for all the defunct company’s assets, including its rolling stock, and would be from $2 billion to $3 billion.


“We will get this done,” the source told the Journal of Commerce last week. “We’re as close as ever to bringing these jobs back and closing a gap in the economy caused by the collapse of Yellow.”


But the source acknowledged time is running out, with only weeks, or less, left. Jack Cooper Transport and the Teamsters need to convince the US Treasury Department to extend the maturity of its $700 million COVID-era loan to Yellow, which comes due in 2024, into 2026.


The extension allegedly is needed to pull together financing and make a better offer to Yellow’s lenders. The Wall Street Journal on Thursday reported Jack Cooper Transport already has $1 billion to pay off secured creditors and would offer unsecured creditors a share in the business.
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What comes next?​


Even if Jack Cooper Transport is able to check all the boxes and quickly get the financing necessary to make a bid that would attract Yellow’s lenders and creditors, it’s unclear what comes next.


The goal is to create a privately owned LTL company from the bones of Yellow that would be separate from Jack Cooper Transport. The new company would have a Teamster workforce.


Rehiring as many as 22,000 former Yellow Teamsters would take time, but could be done, said the source close to the deal, who spoke on condition of anonymity.


But others, including former Yellow managers, say it would take months, if not years, to not only rehire Teamster drivers and dockworkers but to reopen terminals, check and repair trucks, and restart business. Yellow Teamsters may still be looking for jobs, but many former Yellow managers now work for LTL competitors.


“I can’t see how this can be done at scale or within a reasonable time frame,” said one former mid-level Yellow manager who requested anonymity.


Even if the acquisition, rehiring and other preparations can be done, the company will need a revenue stream, which means convincing former customers to come back before freight moves.
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The source close to negotiations between Jack Cooper, the Teamsters union, Yellow and the Treasury Department said Jack Cooper Transport does have a plan to restore the company, based on extensive analysis, but details aren’t available to share.


The owners of Jack Cooper Transport have a reputation for taking distressed companies and turning them around, including Jack Cooper Transport itself. The car hauler was close to failure when CEO Michael Riggs purchased it in 2008. His daughter, Sarah Amico, is now executive chair.


A decade later, Riggs successfully guided the carrier through bankruptcy reorganization in 2019. In recent years, Jack Cooper Transport has acquired other companies, including Oklahoma-based Moore Transport in August, reportedly converting its workforce from independents to Teamsters.


But Yellow isn’t a distressed company, it’s a bankrupt company that ceased operations more than three months ago. And it was much larger than Jack Cooper Transport, which trucking newspaper Transport Topics ranked 75th among the 100 largest for-hire carriers last year. Yellow ranked 13th on that list.


“This is going to be fascinating to watch,” said the former Yellow manager.


Contact William B. Cassidy at [email protected].
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What I find interesting is how all the opposition of a restructured Yellow push the false narrative that it is a dead company when in fact CH11 is for the purpose of restructuring and not liquidation. If liquidation was the primary reason for undergoing bankruptcy protection then it should have been filed under Ch7.

A going concern bid and restructuring of debt is exactly what you would want from a CH11 filing in order to save a company from unnecessary liquidation just to appease a group of greedy wall street hedge funds and lenders who want their payday at the expense of hard working middle class blue collar union jobs.

The judge should absolutely first consider a going concern bid and make it a No #1 priority offer in the restructuring and continuing operation of Yellow. We are on a layoff and can be recalled to work next week if required as in any other type of layoff. All it takes is a few larger 3PL to turn on the faucet and start redirecting freight back as quickly as they redirected it away. I would gather there is also plenty of Govt freight that will be put back in the pipeline immediately upon opening the doors.
 
RumRunner1 said:
What I find interesting is how all the opposition of a restructured Yellow push the false narrative that it is a dead company when in fact CH11 is for the purpose of restructuring and not liquidation. If liquidation was the primary reason for undergoing bankruptcy protection then it should have been filed under Ch7.

A going concern bid and restructuring of debt is exactly what you would want from a CH11 filing in order to save a company from unnecessary liquidation just to appease a group of greedy wall street hedge funds and lenders who want their payday at the expense of hard working middle class blue collar union jobs.

The judge should absolutely first consider a going concern bid and make it a No #1 priority offer in the restructuring and continuing operation of Yellow. We are on a layoff and can be recalled to work next week if required as in any other type of layoff. All it takes is a few larger 3PL to turn on the faucet and start redirecting freight back as quickly as they redirected it away. I would gather there is also plenty of Govt freight that will be put back in the pipeline immediately upon opening the doors.
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Rum, hate to burst your bubble but Yellow is dead, door nail dead, roadkill dead and not on life support anymore. No revenue coming in ZERO cash flow. And if my memory serves me correctly we are not on layoff we were all terminated. If they said it could take months to HIRE workers back that doesn’t mean a phone call and you clock in tomorrow. That means hoop jumping, back ground checks, social media checks and the whole deal. I am pretty sure there is very little employee records left. This is going to be a start up company and that name carries more baggage than a fashion model at the airport.
Hand picked drivers that had great customer relations would be best place to start to regain freight. Yellow had an arrogant attitude in upper management and if they think they can just flip the switch and be back in business they might rethink their plan. Remember in 08 and 09 other companies cut rates to run them out of business. Think that won’t happen again.
Good luck I mean great luck if you go back.
 
RumRunner1 said:
What I find interesting is how all the opposition of a restructured Yellow push the false narrative that it is a dead company when in fact CH11 is for the purpose of restructuring and not liquidation. If liquidation was the primary reason for undergoing bankruptcy protection then it should have been filed under Ch7.

A going concern bid and restructuring of debt is exactly what you would want from a CH11 filing in order to save a company from unnecessary liquidation just to appease a group of greedy wall street hedge funds and lenders who want their payday at the expense of hard working middle class blue collar union jobs.

The judge should absolutely first consider a going concern bid and make it a No #1 priority offer in the restructuring and continuing operation of Yellow. We are on a layoff and can be recalled to work next week if required as in any other type of layoff. All it takes is a few larger 3PL to turn on the faucet and start redirecting freight back as quickly as they redirected it away. I would gather there is also plenty of Govt freight that will be put back in the pipeline immediately upon opening the doors.
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It’s not like the patient is in the ICU,” said Satish Jindel, president of SJ Consulting Group, a freight transport industry research and consulting firm. “The patient is dead.”
 
Yellow reopening soon why would they call my old boss ask her to come back? Do you forget it's election time gas and interest coming down to help Biden win trucking heats up again in the spring. Plenty of people who can't find jobs happy to come back.
 
Jaloc said:
Yellow reopening soon why would they call my old boss ask her to come back? Do you forget it's election time gas and interest coming down to help Biden win trucking heats up again in the spring. Plenty of people who can't find jobs happy to come back.
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Visitor here. The only possible reason I can see for anybody returning is if they were long timers and could not find another job within the same local to continue the last few years on a pension. If Yellow was no union, no way in hell
 
dokman said:
Rum, hate to burst your bubble but Yellow is dead, door nail dead, roadkill dead and not on life support anymore. No revenue coming in ZERO cash flow. And if my memory serves me correctly we are not on layoff we were all terminated. If they said it could take months to HIRE workers back that doesn’t mean a phone call and you clock in tomorrow. That means hoop jumping, back ground checks, social media checks and the whole deal. I am pretty sure there is very little employee records left. This is going to be a start up company and that name carries more baggage than a fashion model at the airport.
Hand picked drivers that had great customer relations would be best place to start to regain freight. Yellow had an arrogant attitude in upper management and if they think they can just flip the switch and be back in business they might rethink their plan. Remember in 08 and 09 other companies cut rates to run them out of business. Think that won’t happen again.
Good luck I mean great luck if you go back.
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DM, are you aware that at least some of the "permanently laid off and consequently terminated" employees went to the trouble to formally protest their termination? I know; I'm one of them. If you didn't take that step, then I agree you are terminated since it's now been three months. If you did take that procedural step in a timely manner, then you are laid off and subject to recall for five years if it is bought as a "going concern". This is reinforced because the management didn't respond to the "protest of termination" in regard to anyone so far as I know. Of course, I'm watching this play out.
 
As I stated prior, this is a diversionary tactic. It takes the attention off of the massive teamster failure here and creates false hope that the jobs stolen by the union will return.
This tactic goes back 2,000 years.
The company was a bad business model, someone expects others to believe a company with $360 million in car hauling revenue can reconstitute a $2 BILLION LTL Carrier with a pi** poor reputation??
The necessary technology investment would be far too much
More importantly the brand is tainted and no customers will consider returning unless they were far cheaper than every other carrier.
 

"Landlords Object To Payments Yellow Proposed To Discard Leases​

November 10, 2023 Taylor Driscoll, Boston
Trucking company Yellow has hit another bump in the road as it tries to get out of leases across the U.S. and Canada as part of its bankruptcy proceeding.
Landlords have objected to the amount the company has offered to pay to get out of 178 leases, CoStar reported. The objections stem from unpaid rent, taxes, late fees and maintenance, and property damages.
 
Jaloc said:
Yellow reopening soon why would they call my old boss ask her to come back? Do you forget it's election time gas and interest coming down to help Biden win trucking heats up again in the spring. Plenty of people who can't find jobs happy to come back.
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Are you saying they recently called your old boss and asked her to come back? Can you please elaborate on this with more details???? Temp assignment? They are currently under bankruptcy proceedings so I would think they are limited to hiring anybody new right now without court approval due to restrictions on spending additional monies...She would need to have some special skill or credential needed immediately until the sale or transfer of everything is finalized.
 
RumRunner1 said:
Are you saying they recently called your old boss and asked her to come back? Can you please elaborate on this with more details???? Temp assignment? They are currently under bankruptcy proceedings so I would think they are limited to hiring anybody new right now without court approval due to restrictions on spending additional monies...She would need to have some special skill or credential needed immediately until the sale or transfer of everything is finalized.
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Rum, thanks for "liking" my post, and for expressing your optimism in your post. While nothing is "impossible", there is a likelihood factor that must be considered. In this case: a) the rolling stock that is owned by Yellow Corp. is all going to auction through Ritchie Brothers and their affiliates. That is already underway. b) the rolling stock that had been leased either has or is in the process of being repossessed. c) The real estate auction has now closed (November 9th) and is in "wrap-up and award" mode. The rolling stock and the real estate are the two most significant asset groups. The "going concern" goodwill, that is the willingness of the customer base to transact business with Yellow, is GONE! Most of the employees, workforce and management alike, have either gone on to other things, retired or are looking for something else (this group would be the most likely to return to a "going concern").
So...the likelihood of this company "rising from the ashes" is extremely slim, almost to the point of zero likelihood. Why the IBT and Jack Cooper, who has recently had their own formidable financial problems, would hoist this flag is beyond my understanding. Do they really think that FedEx, XPO, Estes, OD, T-Force and all the other carriers out there are going to roll over and say "Welcome back!!"? I don't think so either.
Again, very little is impossible, but this is about as close to it as anything I've seen.
 
Real Teamster said:
Rum, thanks for "liking" my post, and for expressing your optimism in your post. While nothing is "impossible", there is a likelihood factor that must be considered. In this case: a) the rolling stock that is owned by Yellow Corp. is all going to auction through Ritchie Brothers and their affiliates. That is already underway. b) the rolling stock that had been leased either has or is in the process of being repossessed. c) The real estate auction has now closed (November 9th) and is in "wrap-up and award" mode. The rolling stock and the real estate are the two most significant asset groups. The "going concern" goodwill, that is the willingness of the customer base to transact business with Yellow, is GONE! Most of the employees, workforce and management alike, have either gone on to other things, retired or are looking for something else (this group would be the most likely to return to a "going concern").
So...the likelihood of this company "rising from the ashes" is extremely slim, almost to the point of zero likelihood. Why the IBT and Jack Cooper, who has recently had their own formidable financial problems, would hoist this flag is beyond my understanding. Do they really think that FedEx, XPO, Estes, OD, T-Force and all the other carriers out there are going to roll over and say "Welcome back!!"? I don't think so either.
Again, very little is impossible, but this is about as close to it as anything I've seen.
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Well thought out post. The entire proposal makes no sense.
Jack Cooper has not shown a propensity to generate profits in the business that they call home. LTL is far more complex that car hauling.
Those supporting or believing in this need to prepare for another let down soon.
 
Real Teamster said:
DM, are you aware that at least some of the "permanently laid off and consequently terminated" employees went to the trouble to formally protest their termination? I know; I'm one of them. If you didn't take that step, then I agree you are terminated since it's now been three months. If you did take that procedural step in a timely manner, then you are laid off and subject to recall for five years if it is bought as a "going concern". This is reinforced because the management didn't respond to the "protest of termination" in regard to anyone so far as I know. Of course, I'm watching this play out.
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“If” the Teamsters are behind this according to sources and Jack Cooper is the proud Teamster company they claim….one would think employees would be called back according to seniority! I am sure there is employees who never received a letter nor did they send them certified, which I would think could create a grievance tsunami.
 
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