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99-year old trucking company Yellow shuts down, putting 30k out of work

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Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#101

Post by imglorp »

didgetmaster wrote: post #62
gottorf wrote: post #46

Earlier quoted context omitted.

Pensions seem like an outdated concept, when 401Ks and IRAs are options. Pensions are essentially a tradeoff of lower pay now in exchange for benefits in the future, with a sprinkle of an incentive for increased retention added in, but with the critical downside (to the employer) of it basically being an unbounded, undefined financial downside for them at the tail end. Employers should pay people, contribute to their…

Exactly. Pensions might have been practical back in the day when people worked for "the company" for their whole career. But when so many change jobs every 5 years or less, they make no sense.

> when so many change jobs every 5 years or less

That wording implies voluntary.

The new loyalty relationship is immensely asymmetric: "the company" holds you by the heart plug (health plan, visa, vesting) while at the same time will boot out a substantial fraction of its workforce, regardless of merit, the moment a quarter turns yellow in some spreadsheet or the M+A pendulum comes around again.

There are very few places anyone can spend their whole career at one company even if they wanted to. I've been at this 30 years and I think I've had 10 jobs but only quit once.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#102

Post by HenryBemis »

marcelluspye wrote: post #61
annacappa wrote: post #36

Funny how this is being framed by the article writer in terms in unionization. Are they suggesting that the workers should just give up their pensions and wages so that a clearly broken and mismanaged company should just lurch onwards? Why is it when a company succeeds everyone praises the management and heaps huge bonuses on the C suite but when they fail they try and blame the workers.

Privatize the gains, socialize the losses. Even in the news.

"Socializing the losses". It will happen anyway. Perhaps not in the USA, but in Europe, the 30,000 unemployed would get an unemployment benefit for X amount of months, their formetly-private-provided healthcare wouldn't be paid for (thus covered by the state), and so on.

So, doing the math.. does it make sense to 'inject $€ X million to keep the company afloat, get the 30,000 and their families fed, the money would come back to the state via taxes, in the hope that the company will go back to the green?

If one (not me) can crunch the numbers, it could (or not?) point to the direction that it was money well spent - and net-net it wasn't "$€ X million" wasted but a fraction of that(?)

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#103

Post by bmm6o »

cobrabyte wrote: post #19
paxys wrote: post #11

> The company received a $700 million loan from the federal government in 2020, a loan that resulted in taxpayers holding 30% of its outstanding stock. And the company still owed the Treasury department more than $700 million according to its most recently quarterly report, nearly half of the long-term debt on its books. Let's see what people who routinely rant about government bailouts have to say about this. I pred…

> taxpayers holding 30% of its outstanding stock. It's always amusing that they frame this as the lowly taxpayer holding stock in a company after the government bails a company out. I've never received the stock certificates, and I certainly don't see any dividends or have the ability to sell my commensurate portion of the stock holdings. The taxpayer pays for the bailouts but does not see any benefit for doing so.

You don't get to walk into a base and fly military jets either, but it's not wrong to describe them as being owned by the citizens of the country. The government owns the stock, and its performance either way impacted you (us) in some quantifiable way.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#104

Post by dehrmann »

nickff wrote: post #49
jl6 wrote: post #35

> Higher prices will hit Yellow customers, Jindel said. > “The reason they were using Yellow was because they were cheap,” he said. “They’re finding out that price was below the cost of supporting a good operation.” What happened that made them decide to shut the company down instead of raising their prices?

I would presume it was because the union contract did not allow them to lay-off or furlough any workers, and they'd lose less money by being 'cheap' than by being more expensive and having workers sitting around. Put another way, their labor was probably their largest cost center, and a fixed cost, which means that their marginal cost to provide the service was actually low, but the company was unprofitable due to th…

They also claimed that the union wouldn't meet them at the bargaining table. I guess if you're contractually obligated to burn through money, you do that until you're insolvent and go to bankruptcy court to sort it out.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#105

Post by listenallyall »

GoofballJones wrote: post #70
annacappa wrote: post #36

Funny how this is being framed by the article writer in terms in unionization. Are they suggesting that the workers should just give up their pensions and wages so that a clearly broken and mismanaged company should just lurch onwards? Why is it when a company succeeds everyone praises the management and heaps huge bonuses on the C suite but when they fail they try and blame the workers.

Though the article did hit the nail on the head with this statement from the Teamster's head: “Today’s news is unfortunate but not surprising. 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 workers conceded quite a bit over the years, but despite that and the bailout, the man…

To be fair, the workers made concessions, but they remained higher-cost than non-union competitors. Unfortunately for them, trucking is a highly-competitive industry with little brand loyalty where lowest cost usually wins.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#106

Post by WkndTriathlete »

hibikir wrote: post #96
blitzar wrote: post #79

Earlier quoted context omitted.

You can easily compete if you have a pension liability from workers no longer there by making provision for it at the time that the liability is created.

Can you? A defined benefit plan is ultimately involving someone taking a risk. One either makes the risk very small, and therefore being a very expensive benefit from the very beginning, or be aggressive, and risk being an underfunded benefit. Either way you slice it, someone providing defined contributions instead is far safer, and can safely outcompete the defined benefit company, as they aren't taking on either si…

> Can you? A defined benefit plan is ultimately involving someone taking a risk.

Yup. No less than Warren Buffett, who spent literally his entire career performing risk analyses, could figure out a way to manage defined benefit plan risk, and stated as such in a (now famous) memo in the late 60s or early 70s.

Couple that with the number of pension defaults and pension haircuts that have occurred and are likely to continue to occur and 401(k) plans look a lot more attractive, both to the employer and to the employee.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#107

Post by jl6 »

nickff wrote: post #88
jl6 wrote: post #69

Earlier quoted context omitted.

Maybe, but at least a couple of quarters of demonstrable uncompetitiveness would be solid evidence to take to the negotiating table with the unions to get the labor cost down (if that really was the primary cost problem).

Labor unions which have members at multiple companies in one sector are often reluctant to make concessions at any one company, lest it erode their bargaining positions at the others.

Yeah, I guess, it just seems crazy that all 30,000 people losing their jobs could be a tolerable outcome for the employees.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#108

Post by dehrmann »

jl6 wrote: post #59
nickff wrote: post #49

Earlier quoted context omitted.

I would presume it was because the union contract did not allow them to lay-off or furlough any workers, and they'd lose less money by being 'cheap' than by being more expensive and having workers sitting around. Put another way, their labor was probably their largest cost center, and a fixed cost, which means that their marginal cost to provide the service was actually low, but the company was unprofitable due to th…

But even if their labor cost was fixed and high, why not attempt to recover that cost by raising prices?

I don't know their specific numbers, so this might not be true in their case, but raising prices will drive away customers. Depending on where you're at on the curve, this can reduce your revenue because the adding higher price didn't make up for the lower volume.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#110

Post by [deleted] »

marcelluspye wrote: post #61
annacappa wrote: post #36

Funny how this is being framed by the article writer in terms in unionization. Are they suggesting that the workers should just give up their pensions and wages so that a clearly broken and mismanaged company should just lurch onwards? Why is it when a company succeeds everyone praises the management and heaps huge bonuses on the C suite but when they fail they try and blame the workers.

Privatize the gains, socialize the losses. Even in the news.

[deleted]
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