Sean O’Brien just may be the worst labor leader in America. In the event you don’t imagine me, just consider his horrible performance last week culminating within the unemployment of 1000’s of his working-class members, and a sweet payday for Wall Street fat cats.
Because the president of the International Brotherhood of Teamsters, O’Brien styles himself as a fighter, an in-your-face sort of guy in public and on social media, daring big corporations to mess with him and his members under the handle @TeamsterSOB. He recently negotiated a take care of UPS that averted a strike and won some concessions, so he should be doing good, right?
A more in-depth have a look at O’Brien’s oeuvre as a labor leader is more complicated: he’s buddies with Bernie Sanders, the socialist Vermont senator who has a habit of praising dictators like Fidel Castro. Nice. He’s an enormous name-caller during public confrontations. Childish. He also effectively laid off 30,000 people last week due to an idiotically pointless negotiating strategy that put a trucking company called Yellow out of business. Really dumb.
While you consider the Teamsters, you frequently consider Jimmy Hoffa Sr., its iconic and flawed former leader. Hoffa hung out in jail because he was said to interact with mobsters while conducting union business. But nobody doubted his intelligence or his commitment to the rank-and-file.
He built the trendy Teamsters from disjointed groups of local truckers right into a national powerhouse and the most important union within the country. He knew when to strike and when to not. Something called the National Master Freight Agreement, a algorithm between truckers and employers, was a Hoffa brainchild and it stays in effect to this present day.
Jimmy Hoffa hung out in jail because he was said to interact with mobsters while conducting union business. The LIFE Images Collection via G
It’s widely believed Hoffa was killed by the mob because he put his members’ interests over theirs. After he was released from prison, Hoffa sought to regain leadership of the union and wrest control of it from the mob, until he disappeared in 1975.
Yeah, Hoffa was a loyal, tough and, above all, pretty shrewd guy. His son James P. Hoffa would later run the union in much the identical way. You possibly can’t say the identical for O’Brien within the shrewd department following his dealings with Yellow, an organization that engages in a distinct segment and difficult business often called “Less Than Truckload” freight shipping.
Yellow has been around for nearly a century. In recent times, its management actually made mistakes — a lot of debt for acquisitions. It nearly folded during COVID and needed a loan from the Trump administration to remain in business.
It’s been limping along ever since. Earlier this yr, management got here up with what it billed as a long-term solution to its woes: A restructuring that consolidated operations without layoffs. It also asked its drivers for some trivial concessions like unloading trucks.
Enter Mr. Tough Guy Sean O’Brien. The Teamsters union chief said no — his members have been giving an excessive amount of back to the jackasses who’ve been running Yellow into the bottom for too long. Yellow said that if the union didn’t compromise, it might exit of business.
O’Brien’s response: A photograph on Twitter of a gravestone, with the epitaph: “Yellow 1924-2023.”
Was it a bluff? Yeah probably, but it surely was a reasonably dopey one. Perhaps O’Brien desired to squeeze just a few more bucks out of Yellow in labor concessions, although Yellow isn’t exactly rolling in money and wasn’t bluffing about bankruptcy.
Twenty-two thousand teamsters who worked at Yellow lost their jobs. Dia Dipasupil
Sean’s tactic backfires
In any event, O’Brien’s brinkmanship (in case you can call it that) backfired. Yellow filed last week and, yes, 30,000 people, 22,000 of them Teamsters, lost their jobs.
When asked by Fox Business’s Cheryl Casone if he felt any responsibility, O’Brien’s response was “No, under no circumstances,” and that it was all Yellow’s fault. Pretty laughable stuff for anyone with half a brain, including his members, whom I hear put pressure on O’Brien to launch last-minute negotiations with the corporate.
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O’Brien says the corporate called him first. Either way, it was too late: Company officials told me they told O’Brien his intransigence caused all customers to bolt to other carriers.
A lose-lose, right? Nope. Wall Street is making bundles off Yellow’s carcass. The corporate filed what’s often called a Chapter 11 liquidation. Which means it must pay back its creditors and make good on $1.5 billion in secured debt. A bit of that may go to repay the federal-government loan, and one other, greater piece shall be to make the hedge fund Apollo Global whole.
Apollo is sitting pretty within the aftermath of Yellow’s demise, and so is a restructuring firm named Ducera, which has been hired to liquidate the corporate and pay back the secured creditors.
Ducera is raking within the money because Yellow actually owns its assets — trucks and the land beneath its offices and terminals — and bankers there see big interest from buyers with bids that might exceed debt levels as they sell Yellow’s assets. One reason: They shall be sold to competitors that aren’t union shops and thus can afford to expand without having to take care of O’Brien and the Teamsters.
That’s why savvy traders are betting that stockholders, who often get worn out in liquidation, will now get some a reimbursement on this one due to the strong demand for assets that Ducera is bidding out.
Shares of Yellow, which fell to below $1 and were heading to zero in the course of the Teamsters standoff, closed Friday at $1.86 and at one point spiked above $4. Hedge funds are jumping in and out of the stock making tons of money while all those Teamsters are observing unemployment.
All due to the “brilliance” of @TeamsterSOB.