The embattled US trucking company Yellow ceased operations on Sunday, and it has laid off all 30,000 of its workers.
Yellow, once one of America’s dominant shipping companies, intends to file for bankruptcy, said the Teamsters union, which represents employees of the firm. The filing would come after Yellow failed to reorganize and refinance more than a billion dollars in debt.
The company, whose customers included Walmart and Home Depot, has been financially imperiled for years.
It received a $700m pandemic relief loan from the federal government in 2020, which loaded further debt on to a struggling service.
Earlier this month, Yellow averted a threatened strike by 22,000 Teamsters-represented workers and last week it said it was exploring opportunities to divest its third-party logistics company.
“Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” the Teamsters general president, Sean O’Brien, said in a statement.
The company claimed in June that the Teamsters union was blocking restructuring and modernization efforts, collectively known as “One Yellow”.
The Teamsters union had been negotiating a new contract with Yellow when it received notice the company was ceasing operations, it said in a statement.
Yellow executives said its restructuring efforts were critical for the company’s survival and ability to refinance about $1.3bn of debt due to be repaid by 2024.
More than half of that debt was attributed to the pandemic-era $700m loan. That loan, from US government during Donald Trump’s presidency, was provided in a deal that handed 30% of Yellow to the US taxpayer.
National Public Radio reported that a congressional investigation in June found the loan had been given to Yellow by mistake. The investigation also found that the company had not actually met the standards to qualify for the disbursement.
Since the time of the loan, Yellow’s stock has lost 82% of its value, according to CNN.
Reuters contributed reporting
This article originally appeared on The Guardian