U.S. trucking firm Yellow averted a threatened strike by 22,000 Teamsters-represented workers on Sunday, saying the company will pay the more than $50 million it owed in worker benefits and pension accruals.
"Agreement by the Central States at the urging of the Teamsters gives Yellow 30 days to pay its bills with the understanding the company will do so within the next two weeks," Teamsters union said on Sunday.
Yellow is the third-biggest U.S. trucking company specializing in the less-than-truckload segment that combines shipments from different customers in the same trailer.
Its customers include large retailers like Walmart and Home Depot, manufacturers and Uber Freight, some of which have paused cargo shipments to the company for fear those goods could be lost or stranded if the carrier goes bankrupt.
Competitors, who are grappling with a sharp drop in freight volume, are expected to cherry-pick the company's customers, trucking experts and analysts said.
In 2020, then-U.S. President Donald Trump bailed out the company with a $700 million pandemic relief loan. In exchange, the federal government took a 30% stake in Yellow.
The Nashville, Tennessee-based company formerly called YRC Worldwide has not significantly repaid that loan, which is part of $1.2 billion in debt it is scrambling to refinance before it comes due next year. Yellow's other lenders include a group led by Apollo Global Management.
Company executives appealed to the International Brotherhood of Teamsters for help slashing expenses as cash dwindles. It has successfully won such concessions in the past, but this time was rebuffed by new Teamsters General President Sean O'Brien.
"Following years of worker give backs, federal loans, and other bail outs, this deadbeat company has only itself to blame for being in this embarrassing position," O'Brien said in a statement last week.
O’Brien is also leading negotiations covering roughly 340,000 U.S. employees at United Parcel Service.
A federal judge in Kansas on Friday rejected Yellow's request to block the Teamsters from striking over the delinquent benefit payments.
(Reporting by Lisa Baertlein in Los Angeles and Ananta Agarwal and Mrinmay Dey in Bengaluru; editing by Diane Craft and Chris Reese)