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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

#71

Post by pm215 »

gottorf wrote: post #46
EMM_386 wrote: post #22

"The closing is bad news not only for its employees and its customers, who generally used Yellow because it offered some of the cheapest rates in the trucking sector." Perhaps they shouldn't have offered the cheapest rates in the trucking sector while failing their obligations. Taxpayers ended up holding 30% of this company's stock and they still couldn't figure out how to become profitable after a $700 million infus…

Pensions seem like an outdated concept, when 401Ks and IRAs are options.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…

My counterargument to this is:

Pension/retirement arrangements where the contributions are defined but the benefits are not are a risk to the individual -- you have to figure out "how much do I want to invest, what do I think the market will do, where should I put the money?", and if you get it wrong you don't have enough money in retirement. For the company, on the other hand, they're very low risk, because the amount of the company's liability is clearly defined and limited up front.

Arrangements where the benefits are defined are not a risk to the individual (who knows how much they will get, and will get it regardless of market conditions over the next few decades); instead they're a risk to the company/government/etc that provides them (if they set the defined final pension too high and investments don't go so well then it costs the company more than they expected).

In general my preference is that (as a society) we should prefer to impose risks not on individuals but on large organizations who can afford to employ people who take the time to assess those risks and make the necessary decisions, and who have the resources and timescales to be able to weather unexpected downturns. So I think defined-benefit is better than defined-contribution.

(This is of course entirely not the way the pension setup has gone, at least in the UK -- defined-benefit is getting rarer and rarer, and defined-contribution is pretty much the standard for the private sector these days. But I think it's an unfortunate trend.)

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

#72

Post by strictnein »

fargle wrote: post #65
DoubleDerper wrote: post #39

Let's take a second to recognize the ironic branding of Yellow corporation. It's orange. Nothing yellow about it. Some person or group of people made that decision.

why are yellow trucks orange: https://www.myyellow.com/us/en/about-us/extra-mile-blog/why-...

"Swamp Holly Orange" is a great name for a color.

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

#73

Post by bko »

EMM_386 wrote: post #22

"The closing is bad news not only for its employees and its customers, who generally used Yellow because it offered some of the cheapest rates in the trucking sector." Perhaps they shouldn't have offered the cheapest rates in the trucking sector while failing their obligations. Taxpayers ended up holding 30% of this company's stock and they still couldn't figure out how to become profitable after a $700 million infus…

> People will blame unions because the company had to fund pensions and health insurance. It likely will come back as a private company with lower pay, worse benefits, and maybe if people are lucky a 401k.

You can never compete if you have a pension liability from workers no longer there. A competitor can always come in without that liability and out compete you. It's not good for the business or the employees who will get screwed 30 years later. Why is this such a hard lesson to learn?

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

#74

Post by code_runner »

boeingUH60 wrote: post #4
sizzzzlerz wrote: post #2

So 30000 people lose their job and the US taxpayer is out more than $700 million in loan guarantees. The only question remaining is how much money do the owners of the company walk away with?

Yellow is a publicly-traded company. Shareholders are wiped out…such is the risk of investing

I believe they are referencing executives not stock owners. I imagine a company like this going out of business is pretty profitable for execs... but thats just me guessing. Its entirely possible that this company was run by the few executives with souls and a sense of actual responsibility

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

#75

Post by cguess »

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.

Not every company is a tech company and not every worker is in their 20's. If you're a truck driver there's a good chance you do work for the same company for your entire career.

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

#76

Post by bastardoperator »

EMM_386 wrote: post #22

"The closing is bad news not only for its employees and its customers, who generally used Yellow because it offered some of the cheapest rates in the trucking sector." Perhaps they shouldn't have offered the cheapest rates in the trucking sector while failing their obligations. Taxpayers ended up holding 30% of this company's stock and they still couldn't figure out how to become profitable after a $700 million infus…

"Lo barato sale caro" which translates to the "the cheap becomes expensive". If you see something that is cheaper then everything else, just assume they're cutting corners in places that matter. It will be interesting to see how many millions of dollars they use to keep the executive team in place during the bankruptcy despite the fact it's their decisions that lead to failure. I also wonder how much student debt we could have cancelled for 700M, it would have been a better investment.

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

#77

Post by hoofhearted »

throwawaysleep wrote: post #25
enjoylife wrote: post #8

I hope there will be a HBR or some other case study done on Yellow, because the interplay between bad loans + union demands + poor management seems like something US businesses need to be more prepared for.

[flagged]

The electrical union that taught me all my fundamental understanding of electrons was created back in the day because the fatality rate among electricians at that time was 1/2 lol.. For every two electricians working to electrify America, one of them wouldn’t make it home to their families.

Ironically, the guy who created the IBEW, Henry Miller, was himself killed on the job after making contact with a live wire and falling off the pole and hitting his head.

In the early days of electricity, the workers had no understanding of the thing they were working with, and they certainly weren’t given proper tools.

The voltage tester of the day was licking the wire to see if it was live. A method thought to save people after electrocution back then was to stick your fingers in their rear to give them a sudden jolt lol.

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

#78

Post by darig »

bko wrote: post #73
EMM_386 wrote: post #22

"The closing is bad news not only for its employees and its customers, who generally used Yellow because it offered some of the cheapest rates in the trucking sector." Perhaps they shouldn't have offered the cheapest rates in the trucking sector while failing their obligations. Taxpayers ended up holding 30% of this company's stock and they still couldn't figure out how to become profitable after a $700 million infus…

> People will blame unions because the company had to fund pensions and health insurance. It likely will come back as a private company with lower pay, worse benefits, and maybe if people are lucky a 401k. You can never compete if you have a pension liability from workers no longer there. A competitor can always come in without that liability and out compete you. It's not good for the business or the employees who wi…

[dead]

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

#79

Post by blitzar »

bko wrote: post #73
EMM_386 wrote: post #22

"The closing is bad news not only for its employees and its customers, who generally used Yellow because it offered some of the cheapest rates in the trucking sector." Perhaps they shouldn't have offered the cheapest rates in the trucking sector while failing their obligations. Taxpayers ended up holding 30% of this company's stock and they still couldn't figure out how to become profitable after a $700 million infus…

> People will blame unions because the company had to fund pensions and health insurance. It likely will come back as a private company with lower pay, worse benefits, and maybe if people are lucky a 401k. You can never compete if you have a pension liability from workers no longer there. A competitor can always come in without that liability and out compete you. It's not good for the business or the employees who wi…

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.

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

#80

Post by Silverback_VII »

Buttons840 wrote: post #56
ajsnigrutin wrote: post #38

Earlier quoted context omitted.

This works in a vacuum, but in many industries you get undercharging and living off investments, be it Uber or a gajillion startups, many of them mentioned here on HN.

Why are industries dominated by large unprofitable companies? I was told the way to succeed was to offer goods and services that people want, make a profit and grow the company; this was a key benefit of the free market and ensured consumers had access to many good choices and it was all stable and sustainable. Instead unprofitable companies dominate, not because they succeeded in the market, but because they receive…

>Why are industries dominated by large unprofitable companies?

The logic is quite simple: by undercutting your competition, you aim to quickly drive others out of business and secure a monopoly. Once in such a position, making a profit becomes much easier.

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