Yellow Corp. May Be Liable For Preston's Pension Bills

Preston Trucking Co.’s abrupt closing last month has raised questions about the timing of the decision and whether former parent Yellow Corp. might end up having to pay its Teamsters’ pension bill.

When Preston called it quits July 26, about 13 months after being spun off debt-free to company management by Yellow Corp., more than 5,000 employees at 61 terminals in 21 cities lost their jobs, 4,000 of whom were members of the Teamsters union.

Roughly 700 of those workers were based in Maryland.

A Maryland official said he contacted Preston Trucking management as soon as he learned of the closing decision to see if the state could offer financial help to the ailing company. He said he was told the decision to go out of business was written in stone.

“I placed a phone call to [Preston President David J.] Letke the day [of the closure announcement],” said David Iannucci, deputy secretary of the Maryland Department of Business and Economic Development. “We wanted to find out what we might be able to do.

“We weren’t given the chance, unfortunately. Two of my assistant secretaries met with [Preston] management and reported to me that the decision was irrevocable.”

Iannucci said that as recently as late May local economic development officials met with Preston executives and “there wasn’t even a hint of this pending closure.”

For the full story, see the August 9 print edition of Transport Topics. Subscribe today.