The Life and Death of a Great American Company
The Great Recession changed everything for Yellow Corp.’s trucking business. By Readers Aug. 7, 2023 4:32 pm ET Yellow Corp. trucks sit idle at a company facility in Hayward, Calif., July 31. Photo: Justin Sullivan/Getty Images Regarding your editorial “The Yellow Road to Bankruptcy” (Aug. 1): From 1999 to 2011, I led Yellow Corp. and its successor, YRC, as chairman, president and CEO. In 2003 Yellow Corp. was competing in a consolidating less-than-truckload freight industry with only three national unionized carriers remaining, out of hundreds in previous decades. An opportunity presented itself to build scale and make Yellow more competitive. The resulting merger with Roadway and acquisition of USF provided that scale, taking the company from $3 billion to $10 billion in revenue in three years. Subsequent performance exceeded m
Yellow Corp. trucks sit idle at a company facility in Hayward, Calif., July 31.
Photo: Justin Sullivan/Getty Images
Regarding your editorial “The Yellow Road to Bankruptcy” (Aug. 1): From 1999 to 2011, I led Yellow Corp. and its successor, YRC, as chairman, president and CEO. In 2003 Yellow Corp. was competing in a consolidating less-than-truckload freight industry with only three national unionized carriers remaining, out of hundreds in previous decades. An opportunity presented itself to build scale and make Yellow more competitive. The resulting merger with Roadway and acquisition of USF provided that scale, taking the company from $3 billion to $10 billion in revenue in three years.
Subsequent performance exceeded market expectations, delivering record revenue and also earnings from 2004-06, and building the market cap to $3 billion, creating significant shareholder value along the way.
In 2007 the trap door of the global recession hit the industry and the world. Over the next two years, “8,000 trucking companies went bankrupt, and others simply closed their doors,” per Reuters. But not YRC. In 2009 we began recovering. By the end of 2010 we returned to profitability and completed our restructuring plan.
The debt we accumulated from our merger and acquisition was manageable for a $10 billion company but challenging for a $5 billion, postrecession company. Then a $700 million government loan during Covid doubled the debt in 2020. Leaders do the best they can, but they don’t have a crystal ball.
M&A activity shouldn’t be abandoned because of black-swan events. YRC was on its way to a positive outcome before the global meltdown.
Bill Zollars
Mission Hills, Kan.
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