Jack Cooper Making $2 Billion Bid for Bankrupt Yellow
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Jack Cooper Transport is reportedly making a nearly $2 billion bid to snatch up the assets of Yellow, the trucking firm that collapsed in late July and filed for bankruptcy.
The proposed purchase by the Kennesaw, Ga.-based auto transport and logistics company, which is getting bipartisan support on Capitol Hill as well as behind-the-scenes lobbying by the Teamsters, could salvage many of the 30,000 mostly union jobs lost when Yellow shut down amid accusations of financial mismanagement.
The failed company had operated nationally, accounting for between 7% and 10% of the market. In Georgia, about 850 Yellow drivers had worked for Yellow.
Jack Cooper Holdings ranks No. 75 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. Yellow ranks No. 13.
Yellow Corp. trucks parked at a facility in Hayward, Calif., on Aug. 2. (David Paul Morris/Bloomberg News)
Jack Cooper Transport, a 95-year-old company, provides vehicle hauling and many other logistics services. Its largest customers are General Motors, Ford and Stellantis. The company is owned by the Riggs family, which acquired it from Jack Cooper’s grandson, Thom Cooper Jr.
Sarah Riggs Amico is executive chair of the company’s board. Her father, T. Michael Riggs, is chief executive of the company.
Officials of both the Teamsters and Jack Cooper declined requests for comment.
But Reuters has reported that Amico and other company officials have asked Biden administration officials to support the purchase. Critical to that support is the handling of debt that Jack Cooper would inherit from Yellow. The deal is valued at roughly $2 billion, Reuters reported.
Jack Cooper Transport, a 95-year-old company, provides vehicle hauling and many other logistics services. (Jack Cooper Holdings Corp.)
The immediate cause of Yellow’s breakdown was seen as its inability to refinance $1.3 billion in debt, which included a $700 million pandemic-assistance loan it received from the federal government in 2020. At the time, Sean O’Brien, Teamsters president, harshly criticized Yellow management for failing despite that huge loan in addition to concessions from union workers. He called it “a sad day for workers and the American freight industry.”
But now, that government loan is a pivotal factor in Jack Cooper’s bid.
The pandemic-spurred loan is due next September. To make the purchase of the moribund company more attractive, Jack Cooper is reportedly asking that the U.S. Department of the Treasury extend the deadline for repaying that loan until 2026.
Two letters from U.S. senators have been sent to Treasury Secretary Janet Yellen, arguing that a two-year extension is a smart move both for taxpayers and the overall economy.
“If this loan were to go through bankruptcy, $700 million worth of taxpayer dollars would be essentially wasted,” wrote Sen. Roger Marshall (R-Kan.). The purchase “would provide an ample opportunity to have this loan repaid and the taxpayers made whole again.”
Another letter signed by Sen. Sherrod Brown (D-Ohio) also endorsed the deal as a way to pay off Yellow’s creditors and taxpayers while preserving good-paying union jobs.
Yellow had revenues of about $5 billion and made roughly 50,000 deliveries a day.
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So Yellow’s failure has added to costs of shipments to companies and consumers, Brown wrote, and its revival would reverse that, while also smoothing supply chains.
“At the end of the day, there are thousands of American families that want to see the company’s doors reopen,” he wrote. “Treasury needs to be clear-eyed that union families and the strength of our economy rely on jobs like the ones that were lost.”
That letter was co-signed by six other senators, five Democrats and Bernie Sanders (I-Vt.).
