Semi truck trailers are parked near the Otay Mesa border crossing between the U.S. and Mexico after the company filed for bankruptcy protection in San Diego, California, U.S., August 7, 2023. REUTERS/Mike Blake, license rights acquired
Oct 30 (Reuters) – One of the largest private U.S. auto transport companies is quietly mounting a long-term bid – amid growing interest from the Biden administration – to rescue trucking giant Yellow Corp ( YELLQ.PK ) from bankruptcy and bring it back. About 30,000 unions, according to multiple sources familiar with the discussions.
Trucking company Jack Cooper Transport, which counts General Motors ( GMN ), Ford ( FN ) and Stellantis ( STLAM.MI ) as its main clients, a previously unheralded effort, has gained in recent weeks as a powerful global fraternity. The Teamsters Association and a bipartisan group of U.S. senators have stepped up their pressure campaign against the Biden administration.
Yellow filed for bankruptcy protection in August. A divestiture of the giant’s trucking and terminal assets could begin next month, in a deal expected to value its real estate at $1.5 billion and its fleet of vehicles at hundreds of millions of dollars.
U.S. senators, including Democrat Sheridan Brown, Republican Roger Marshall and independent Bernie Sanders, have asked the Treasury Department in separate letters reviewed by Reuters to extend the maturity of $700 million in 2020 loans from the Trump administration to Yellow Corporation through Covid-19. to enable the government to take nearly 30% stake in the company.
The loans currently mature in September 2024. Jack Cooper’s bid effort depends largely on the Treasury extending its repayment period to 2026, which would allow Jack Cooper to offer favorable terms to Yellow, as it does not have to repay the loan immediately.
Jack Cooper officials, including chief executive Sarah Amico, have been in talks with Biden administration officials in recent months to seek support for extending loan terms. Amico in 2010 He ran unsuccessfully for the Democratic nomination for US Senate in Georgia in 2020.
Those discussions, including on Teamster, have increased in recent weeks, sources said.
White House National Economic Council chief Lael Brainard and White House senior staff adviser Brendan Danaher have received questions about the potential Jack Cooper bid, and the White House is keeping stakeholders updated on the effort, the sources said. he said.
The White House said it is referring all Jack Cooper stakeholders to the Treasury Department. Treasury had no comment on whether it was considering a loan extension.
Union work force
“Unfortunately, Treasury taking these steps is necessary to save tens of thousands of union jobs after years of mismanagement,” wrote Democratic U.S. Senators Bob Casey of Pennsylvania and Tammy Baldwin of Wisconsin.
Treasury is actively looking at whether it can extend the loan amid other hurdles, the sources said.
Jack Cooper and the Teamsters Association declined to comment.
Any bidder would have to convince Yellow’s largest creditor and largest shareholder MFN Partners to recognize the value of the option contract.
Yellow has about 12,000 trucks and 35,000 trailers and hundreds of terminals, according to the bankruptcy court filing. The company hopes to sell the trucking and terminal assets separately, complicating any effort to buy the entire company.
The Biden administration has embraced the nation’s labor force and tried to ease the inflation associated with rising transportation costs, making any concessions that would keep truckers and drivers politically motivated.
bankruptcy termination
Yellow, formerly known as YRC, is one of the nation’s largest truck-to-low-load carriers in the U.S. Its customers include Walmart ( WMT.N ) and Home Depot ( HD.N ).
The company’s bankruptcy record may be tied to the US taxpayer’s rescue of the long-struggling carrier.
Yellow said in its bankruptcy filing that it has $2.15 billion in assets and $2.59 billion in liabilities, and attributed the collapse to a labor dispute with the Teamsters union. About 22,000 unionized drivers quit when it went bankrupt. The union said the Nashville, Tennessee-based company “mismanaged” its path to bankruptcy.
Estes Express’ revised bid for Yellow Corp Shipping Centers offered $1.525 billion in cash, beating a $1.5 billion bid from Old Dominion Freight Line ( ODFL.O ).
Additional reporting by Jarrett Renshaw in Philadelphia Editing by Dietrich Knauss in New York Editing by Heather Timmons and Matthew Lewis
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