I ran a business (albeit a much smaller one) where my primary strategy was low cost. I eventually went out of business too. Low cost is NEVER a winning strategy. Compete on service, compete on product quality, compete on added value, but never try to compete on low cost.
@@zvonemane2534 self driving trucks dont add any value. The load being transported from origin to destination is already expected. Unless self driving makes that happen faster or better, the details of the driving situation doesn't add value. A better example of adding value in trucking would be a load crating/palleting service, or expedited delivery, or load handling services, etc.
@@wouldntyouliketoknow9891 That's where you're incorrect, a self driving truck doesn't need a driver, therefore, it saves the company money thus adding value.
@@bertgrau3934 To the trucking company, not to the customer. When we say compete on value added products and services, we are talking about from the customer's point of view.
Expect many more American Companies, that have done the same thing just like many that have already collapsed. They stopped being in the actual business of trucking and got into the business of growth. Growth allows them to inflate numbers make the stock price go up and let the shareholders cash out and let the company die slow. While everyone acts shocked that it happened. The people in Charge got rich and everyone else got a pat on the back. So many more to come.
As an outsider watching this train wreck I found this video to be spot on. As always the buck stops at the top and those at the head of this company made poor decision after poor decision and it took 20 years, but the inevitable finally occurred. My condolences to those unemployed due too this mess.
Sooooo , the union had NO input for those 20 yrs??? ill bet the dues were never missed. blame ALL THE SUITS WHO DONT REALLY CARE ABOUT THE GUYS WORKING.
One thing not mentioned, how many seen the wreck coming and bailed before it went out of business? I know of at least 200 drivers, and no one else was smart enough to see that mess coming?
@@thomasgirty6397 One COO pay went from $300k in 2020 to $5.3 million in 2021. The CEO pay increased around $800k - not to mention he has sold about 60% of his stock since 2014. They want EVERYONE to blame the unions while not looking at the top executives pay.
@@thomasgirty6397 nothing is black or white, but those major acquisition is clearly what killed the company. Not the unions. They bit off more then they could chew while also not changing their businessmodel
Kinda. But there was a lot more management skullduggery in that case. Ownership and management had already set up a non-union company (Con-Way) in anticipation of Consolidated's collapse, meaning that they deliberately ran that company off the cliff.
@@petergray2712 That's one way to look at it. However, Consolidated Freightways had been spun off 6 years on it's own without debt, while (Con-Way) took the massive pile of debt that had been amassed between 1990-1996 from the acquistion of Emery. I put more blame of CF's demise squarely on the Board of Directors for not recognizing that it was in trouble sooner.
@@jeffbutterfield241 I disagree, the management at CF didn't like the Teamsters. Like another gentleman said, they started Con-Way to takevover the hauling business and get rid of the union. It worked.
"From that time Jesus began to preach, and to say, Repent: for the kingdom of heaven is at hand." Matthew 4:17 "Ye have heard that it hath been said, An eye for an eye, and a tooth for a tooth: But I say unto you, That ye resist not evil: but whosoever shall smite thee on thy right cheek, turn to him the other also." Matthew 5:38-39 "And when thou prayest, thou shalt not be as the hypocrites are: for they love to pray standing in the synagogues and in the corners of the streets, that they may be seen of men. Verily I say unto you, They have their reward. But thou, when thou prayest, enter into thy closet, and when thou hast shut thy door, pray to thy Father which is in secret; and thy Father which seeth in secret shall reward thee openly." Matthew 6:5-6|
This is absolutely ridiculous. A year ago all you could read was headline after headline about how there weren't enough truck drivers and how much freight was being left at docks and without transportation to its final destination. Now the 4th largest LTL company can't run itself well and files for bankruptcy because not even the deep concessions the Teamsters made are enough to keep it running. This sounds like a business poorly run for many, many years. We don't have a "labor shortage" we have a shortage of well run companies that pay a living wage and follow labor laws. There never was a labor shortage, just an over-abundance of greed-driven executives willing to slash at labor until it's not worth it to work the jobs they offer.
And yet, these failing companies are being run by people making millions per year. More in a year than any of their workers will get from the company in a lifetime. "Opps, my bad! I guess I'll use my mountain of cash to take a long vacation while I find another business to trash." -execs, usually
It sure sounds like a simple thing to run a profitable company. I’m shocked that no one on the leadership team of the Teamsters has opted to start their own trucking company and provide reliable, good paying jobs to all of the Teamsters.
There is a labor shortage. We have plenty of people to do the work. The problem is most of those workers are not good employees. What one guy in 1950 could do in 8 hours now takes 4 people. It's because people have become too privileged and lazy. Production efficiency is at an all time low. Workers today lack the discipline and commitment. Your average worker doesn't even keep a job for more than a year at a time these days. That's pathetic. Try running a business and see how your perspective changes.
I worked for a company that got top heavy and ignored the people that got them there. The workers. Today, the company doesn't exist and the hole left behind them was quickly filled by their competitors. Companies have to work as a unit, and not as if by some crown looking down on its workers. There's always a price for that.
You have to blame decades of management, most of which left the company years ago. Current management was doing everything in it's power to correct the inefficiencies that their predecessors left behind and were the cause of the cash bleed. Of course they weren't perfect but the IBT was so angry about the past that they blocked almost all efforts to make things better at the expense of their drivers. Here's an undisputable fact: If the IBT had accepted any deal, those drivers would still be working today but they preferred to let the company die, simply because they could, rather than accepting even any offer to keep 30,000 people employed. Regardless of how you feel about Yellow or the executives, help me understand the logic there? Because even if the only offer was yet another "compromise" as O'Brien puts it, when the other option is all of your people lose their jobs, what reason do you have to decline it? Those drivers could still leave the company if they so chose if they didn't like the deal. As it stands now, they have nothing and many of them are very upset about the situation, especially because it's not likely that they'll find new union jobs, that pay as well, or offer the same benefits. Everyone lost here, including you and me as taxpayers. Had the IBT simply accepted something and let Yellow try, at least these guys would have another year of employment, Yellow would be able to pay back at lease some of the loan they got, and it's at least possible the proposed changes that the IBT was so against would have solved the financial woes. This was dumb. If you disagree, please, explain the logic behind the IBT's decision to just let a company die and 30,000 people lose their jobs when all they had to do was sign a contract where they'd get something rather than nothing.
@@CBrown I assume the IBT assumed that the driver's would collect unemployment for a while and find work at a more lucrative carrier at a higher rate. The assumption is logical.
Being a retired roadway express guy not seeing any roadway yellow trucks & trailers on the road now reminds me of when CF went under it's a very odd feeling.
I was just commenting above about how this reminds me of that. I was an employee at CF when it went under working at the Vancouver headquarters. My dad worked there for 30 years, started months before I was born and I was there when it went under. Broke my heart.
I was a dock worker for Yellow. Completely mismanaged, huge corporate bonuses, huge corporate salaries. They would fly me to other states, pay me per diem, put me up in hotels, pay for stake dinners… because they couldn’t hire anybody on. Because of management’s perspective towards organized employees. Long live the Teamstersz
No one at Yellow Corporate was that smart sadly, they didn’t exactly care where the business went. Especially with the high dollar bailouts they’ve received that would’ve definitely saved them had they not taken MASSIVE bonuses.
In American capitalism intentional downsizing is basically a sin, if its not growth growth growth all the time then you may as well not exist in their eyes.
@@johnblanton2522 What is sad about the pension is that Yellow stopped contributing in 2009. What did they do with all that money, plus 15% pay cut, and 1 week paid vacation pay that teamster gave up to help the company.
PPP loans were all scam. Initially there were strict conditions on who gets the loans, but congress watered them down so that they can distribute the money.
Could it be an aggressive corporate strategy to clean house, change the name, mortgage the brand to pay the debt, and start fresh without union employees? 🤷🏾 That has happened before too.
I remember when yellow bought roadway and the news made me sick 😫 then when they bought Holland I knew then they would file for bankruptcy to kill Union membership like they wanted to in 1994
The people blaming the workers have no idea what they are talking about. The amount these guys gave up in the last couple decades just to keep this company alive is insane. It was entirely corporate greed, and bad management. Y’all need to stop licking those boots. It won’t make you rich too.
The business model of low cost and expansion by acquisition might be a wrong one from the very beginning. The struggle between the board and the union seems by comparison, an irrelevant one.
The union bent over backwards for Yellow for 15 years with concessions and givebacks. I know guys that quit Yellow to go to non-union carriers for more money.
@@cyclopsvision6370 Yep. The union guys think if they wanted a 15% pay increase and 10% more contributions to pensions and they actually got an 8% pay increase and 5% contribution that they were actually giving up something. I'd love to see these union guys actually go out and have their own business. Seems to be a common theme with union members. Never ran a business and know nothing about running a business.
I think the increasing emphasis on intermodal transport effectively doomed Yellow. I mean, look at how some trucking companies have interline agreements to move freight on longer runs via doublestack container trains (one of the first was J. B. Hunt in 1989). And some companies like Amazon and even Walmart started to build their own fleets of long-distance trucks, too.
So Democrats will forgive individual student debt for people who got meaningless degrees but won't forgive the debt of a company which employs 30,000 blue collar workers.
I had a job where I did allot of LTL shipping (usually 1 or 2 skids at a time) in the mid- to late-00's. I knew YRC was in big trouble, and WOULD NOT use them, for fear they'd fold shop while my freight was in their system.
You should have been around in the chaotic Reagan union busting years watching truckers go out of business daily. Horrible event watching truckers go independent taking on debt then working endlessly not making a living.
@@gotwalk my father owned his own truck during the Reagan presidency. He was leased to Bekins Van Lines out of Hillside Illinois. My father owned the truck and pulled their trailer. Ran 48 states and Canada. He supported a wife and three kids. We lived in Los Angeles CA. My two sisters went to college. One attended UCLA and the other Fresno St. We did just fine. My father retired at the age of 63. Yes my mother did work part time. I never went to college. That was my choice. I worked in manufacturing and that was a union shop. The company was Price Pfister located in Pacoima CA. We made faucets for the kitchen, bathroom and shower. Union work wasn't for me. If I had a dollar for every time I heard phrase I PAYED MY DUES. I would be a rich man. Eventually I became a Locksmith and I like my job.
@@mgp870at the end of the day it was the unions who gave us workers a lot of the rights that we enjoy today. I’ve worked non Union my entire life but understand the contributions that unions have done for workers. You can work independently or union if you choose but I don’t like union busters. Those people are for profits over people.
@@fauxque5057 Nonsense... sounds like they made too many acquisitions then got hit by the financial collapse. This is not political so why make it one.
Offered to pay its employees more, blatant lie. Attending the local company meeting, their proposal would have resulted in a 30% pay cut, by reducing my miles. When was the last time you heard anybody taking a 30% pay decrease in any profession?
@@02nupe[nupe nupe] Of course he is. I can guess how he votes too. It's always the working guy's fault and never the company that got bailed out, subsidized and negotiated with (through the unions of all people), and STILL ran the company into the ground
@@samsonsoturian6013 Uh...When banks loan money to people that THEY KNOW can't repay...it is enabling pure and simple. They did it because they didn't care because they would then bundle all of those bad loans and sell them on the market as securities. Hence why the market collapsed. The Government of course is the reason it was allowed to happen. Bill Clinton actually signed the law that started the whole thing. It just took some years before people realized how bad the problem really was and by the time it did it was too late to do anything about. So yes the banks enabled it. Spurred on by poor Government policy sure but they fanned those flames. So yes it _did_ happen as a matter of fact.
I gave Yellow 10 years of my life. I gave the job everything I had, and I done everything they asked me to do. Work nights? Sure. Dock? Absolutely. Out of town for 2 weeks to help out other places? No problem. I was proud to tell people I worked there, just like my Father at Roadway Express for 30 years. 9 months later and it still doesn’t seem real, the whole situation seems like a nightmare. The Teamsters bailed Yellow out time and time again, and corporate management/executive board could not seem to make it work. In my humble opinion, for what it’s worth, is that Yellow intended to shut down all along. The reason I believe it is because Yellow had other options rather than bankruptcy, like splitting off the operating companies and selling them, like UPS did with T-Force. Yellow could have sold Reddaway, Holland, or New Penn, and it would have had the same result as integrating the companies, which was eliminating redundancy. Selling the sister companies would have also added liquid cash to pay down the debt. No company would want to sell some of their assets and downsize, but in a worse case scenario (like bankruptcy) you make painful decisions to survive. In closing, Yellow/Roadway/Holland/New Penn/ Reddaway is just memories now. One thing I’ve learned over the years is that the show goes on, with or without you, big or small. I pray that everyone who has lost their jobs have gained employment elsewhere, for those that retired I want to wish them congratulations on a job well done.
So overexpansion killed the company. Greed. Management wasn’t satisfied to be just one of a few large trucking companies. They wanted to be the biggest, which they could only be by swallowing the competition. Stupidity. Some people automatically blame unions for business failures, when it is usually poor management.
It wasn’t exactly overexpansion. The leader in the LTL industry is FedEx Freight which has been running 15-30% profit margins and expanding like crazy for years and is still making tons of money in its LTL division. But they actually charge what it costs to be profitable. Unlike YRC. Their biggest problem was that they had a reputation for being a low cost carrier which also had a low value of service. They were slow, and much more likely to damage your freight. But that’s the risk you take paying half as much for your freight to move. And as such they could never justifiably raise their prices. All that and other companies paid their workers a lot more than YRC and their subsidiaries ever did. Old Dominion and FXF have their top pay rates nearly 30% higher than USF paid, and 20% higher than Yellow. Yet they were still profitable while yellow failed. With that it’s obviously not the unions fault when they don’t even make as much as the non union shops. It was entirely the yellow business model that screwed themselves.
It's easy. Get Yellow's balance sheet for the past 20 years, look at which team makes money, which team burns money and check their trends/patterns. If the CEO or leadership is to blame, get rid of them asap. After a few changes in leadership and the business is still not improving, maybe it's not the leadership, something else. It's the same principle running financial planning in other successful business.
@@Tmb1112 The biggest problem is leveraged buyouts, i.e. borrowing money to buy competitors, if interest rates go up? BOOM! Or in the words of Steve Eisman (one of the guys who saw the 2008 crash coming) "They mistook leverage for genius".
Not only management or the Union this this. I worked at Yellow too and I saw how drivers and dock workers just milked the company as well. Sad that people think they can milk a company with no consequences.
I worked at Yellow and saw first hand the freight levels going to nothing! Im sure all the executives at Yellow got a golden parachute for there inability to manage while the workers got a job well done message before hitting the streets.. Doesn't seem right ...$ $2,000 a month Cobra from the union medical plan..And made too much for Affordable Care Act medical ..What about the families?? Sad!!
Because it's the truth. Yellow, unlike XPO and ArcBest, doesn't have multi-billion dollar holding companies and Old Dominion, owned by Schneider National propping them financially.
Yellow has a bunch of bankers running it! They had no business buying Roadway, Holland, Preston, or another company! What they needed to do is run their own business and make money for all involved including the drivers! Instead the banker they hired to bankrupt all these other companies lost the business for their company! I remember many of my customers telling me they would never use Yellow again and there you have the moral of the story! Keep you nose out of other peoples business!!
Yeah because they run a successful business. All Im saying is its clear that the ceo cared more about himself getting paid than the business living.@@FreeHat
Great video, but one thing truckers fail to do is planning for retirement. I was a trucker and really didn't know much on growing my earnings then i was working. People grappling with the difficulty of meeting essential expenses often encounter this situation due to inadequate savings during their working years. The decisions taken in readiness for retirement carry extensive consequences, as demonstrated within my own family dynamics. Differing investment approaches yielded disparate results. Guided by a financial advisor, I'm currently retired and still earn monthly from my investments.
Indeed, that's accurate. I'm currently in my mid-50s. My husband and I were on a similar path until a couple of years ago when I decided to shift my investments to her wealth manager. While I haven't quite caught up to her accumulated profits over the years, I'm at least earning more now. I'm generating income even before retirement, and my retirement fund has experienced remarkable growth compared to what it would have with just the 401(k). It's quite amusing.
It's regrettable that many individuals lack access to such insights. I understand why people might become anxious. Insufficient information can indeed pose significant challenges. Personally, I've been able to generate over $31k passively simply by investing through an advisor, and the best part is, I don't need to exert much effort. Regardless of economic fluctuations, skilled wealth managers consistently deliver returns.
“We want to be the low cost option amount our competitors while still maintaining union employees.” Can’t understand how this insane strategy didn’t work… 🤦♂️
I work in distribution and Yellow was the cheapest and the worse carrier. I stopped using them because they were undependable and had bad customer service. I gladly paid more to avoid the headache. They seemed very poorly managed.
@Sacto1654 made a great point that the increasing emphasis on intermodal transport was leaving Yellow behind. I'd add the extreme demand to make logistics prices as close to zero as possible a pain point for all logistics companies.
I worked for Yellow in the 90’s it was introduction to office work (hated it). Back then we were using a computer system strait out of the 70’s! Management had been neglecting this company for over 30 years. The real question we should be asking is how can the system let such a poor player go on for so long. How many tens of thousands will loose their pensions because of this?
What a horrible business model. 5 billion in revenue 20 million net income this ain’t Amazon where they can justify not making profit for all those years
There's no problem. An increasing trend involves companies recruiting independent truck drivers for their fleets, cutting costs by avoiding benefit expenses. These contractors are more affordable than opting for Big Freight Transport. I believe more freight companies might face closures due to this ongoing shift.
Over the last couple of years of dealing with Yellow, its not hard to understand why. Their employees are union and they act horribly to customers. Not moving a shipment 1" further than they think they should not carring whether or not a customer can move if from that location. When asked, they give tons of attitide. I finally had it with being treated so poorly I tried to get the driver's name, but he kept sheilding his ID. I finally got his name and his response was, nothing will happen. I'm union! This type of entiled attitue drove potential customers away. Now I know this won't be every driver, but it was every driver I came accoss.
YRC Always damaged our freight. Compared to SAIA or any other company, by a country mile I had more complaints for damaged freight with YRC than with anyone else.
I was there for 39 years. This is an accurate portrayal of Yellow's collapse. The only thing I would disagree with here is, how things went down with the Teamsters. Yellow wanted to reopen the existing contract with the teamsters while they were in the middle of contract negotiations with UPS. Initially they wanted more concessions. As Murphy said the concession stand was closed. At the last minute they agreed to match the contract that ABF signed with the teamsters. But we all knew the money wasn't there. And the banks caught on. You can't run a business on credit forever.
Wow and back in January after Fastenal let me go because of some budget cuts they had to make at their branch near me, I can’t believe that exactly two weeks later I actually had an interview at YRC but didn’t have enough experience for the job they offered!
I remember when Yellow absorbed Roadway, I was one of their towing contractors here in S. Texas. One thing I remember vividly Roadway trucks and trailers were pure 🗑🚽. I don't see how the drivers dealt with running those junk wagons. Yellow had better equipment but providing service for them was sketchy from pickup to payment. Cut them off at the beginning of the Coof...
$708 Million owed to the Government = owed to the taxpayers that will never ever see this money refunded. Socializing free enterprise is not a good deal. Stop taking our money to bail companies with poor business practices.
Why bailouts aren't in the form of stakeholder control is beyond me. All companies that have received bailouts could have been majority owned and operated by the federal government - so much revenue potential was lost. Plus, think of how better off workers would be under a private-public partnership. Sad.
@@SgtJoeSmith Pretty sure that the workers would have been better off. You must be referring to the executive leadership team. The USPS' budget woes can be largely attributed 2006 law requiring it to prepay retiree health benefits 75 years in advance, a provision to which no other government agency or private corporation is subject. If I were UPS, FedEx, etc. - this would be the type of policy I would lobby so as to remove a public option to logistics.
They are acknowledging the $700 million bailout loan, but only casually mention that the company only exists because taxpayers fully fund the interstate system - another huge subsidy to the trucking industry. I hear there is a driver shortage, so most drivers should be able to find a new job quickly, but probably not on union terms.
Nonsense. Roads are not subsidized (fuels are taxed to fund roads and semi trucks pay additional road taxes above that) and there is no driver shortage. The industry has a glut of capacity. At moment only electric vehicles get free roads, and that won't last long. As electrics gain market share, there will have to be road taxes place on that electricity.
From what I’ve heard it has something to do with selling off the assets of the company. Once the debt is paid back, the equity holders have next claim to the assets.
@@baileylarsen9517 1.6Billion in obligations that need to be paid first. That is a big stock holder risk from looking at the assets on the balance sheet.
Bottom line is that the federal government had no business bailing them out in 2020 and now we stand to lose hundreds of millions on a company that should have been bankrupt years ago. End corporate welfare!
And don't blame the Teamsters. They've made concessions for years to counteract the effects of bad management who saddled them with excessive debt because of their greed in acquiring other truck lines. And then Mr. fiscal conservative trump gave them a massive loan of $700 million even after they discussed bankruptcy. They paid back $232.00.
The new paradigm in trucking has been to make the driver an owner/operator. Thereby putting the debt on the driver, the cost of fuel,maintenance and the truck itself will put you in debt for years. My guess is smaller trucking companies will buy up the assets, and offer the trucks for any one wanting to be an o/o. If they don’t hustle or pay up, take the truck back and find another guy.
Predatory fleece purchase should be illegal, but our government encourages it because corporations matter more than the individual. OTR trucking is so bass ackwards right now it's ridiculous, and the government wonders why they can't recruit drivers anymore.
You nailed it. I see it's not your first rodeo! That business model relies on new drivers being tricked because they don't "own" anything until it's paid of, they assume ALL the maintenance, towing and repair risk, and if they're injured etc and can't drive they lose it all. When it doesn't pay a big business to own the hardware an individual is even more at risk.
If we had just one show that could bring us facts on 1) the real saturation rate of zombies in the stock market? Is it 25%, 45%, 65% zombies? 2) What is the ratio of Wallstreet bankruptcies being Chapter 7 or Chapter 11 Restructuring in the past 15 years. Chapter 11 Restructuring just adds to the large pile of zombies. 3% Chapter 7 and 97% Chapter 11 ??? 3) Moody's, Fitch and S&P are turning a blind eye on companies that are rated Grade BBB investment grade, but should be dropped one grade lower into junk. Compile this information and maybe this is the Black Swan.
SAME premise in the MOVING business... When you're a LOW COST Carrier(i.e. cheap) That business structure will only take you so far because if you're not bringing in a profit ESPECIALLY when a LOT of your profit goes to debt payments.... You won't last too long
What Yellow did to Roadway was illegal and every Roadway employee they screwed over are happy to see them fall. The hostile takeover created HUGE internal animosity.
@@paradiseexpress3639 everyone cares about that, you don’t need a union to do it for you. Unions just get you caught in political battles and keep around workers with poor performance or have done something bad. If a company doesn’t treat you well, leave them to the market.
"Covid Bailout" = Take the money and run, let the workforce be damned. Much easier way to pocket a fortune than, you know, actually running a business properly.
This video makes it sound like people stopped using Yellow because they were mistreating employees. Maybe I missed something, but a bailout never fixed anything.
I think the idea is that customers would rather use a competitor who isn't embroiled in labor issues. Hence the movement of customers away from Yellow, to a competitor with whom your package is unlikely to get stranded due to a strike/walkout.
Did the idiot CEO's and boards that inked these stupid acquisitions have to fork over any pay/bonuses? NAHHHHH! Just screw over employees as normal! Maybe sue the CEO's with the 'Got to grow or die' mentally for wrecking the company?
