Yellow’s Demise Underscores the Need for a New Labor Relations Narrative

Old Labor Habits Die Hard

Since Yellow’s bankruptcy was announced on August 6, 2023, the company’s management team and Teamster union officials have been at odds over the causes. Management blames union intransigence over the operational reforms needed to put debt-plagued Yellow on an even keel. Union representatives point to management’s incompetence and wastefulness as key reasons why the ailing trucker finally succumbed. Yellow’s CEO accused the Teamsters of bullying and destructive tactics, while the unions maintained that worker concessions kept the company afloat for over a decade.

Regardless of who is right, Yellow’s collapse was long in the making, and the acrimony between the two sides did not help the company’s efforts to secure survival. Nor does it provide much solace for the 30,000 or so workers who will lose their jobs.

Yet narratives like this are a hallmark of labor relations. One can envisage management teams pointing to the Yellow debacle as an example of how unions can run amok and destroy companies, reinforcing their warnings against unionization. Unions will probably use the episode to bolster their case that management ineptitude and greed are at the root of many corporate failures. They will argue that workers need trade unions to protect them against managerial misdeeds and to win concessions. Issues such as pay rises continue to dominate negotiations between the two sides.

The Future of Labor is Here Through AI

The narrative is well-established, but it misses the point at a time when AI’s inexorable advance in the workplace is changing the employment agenda.

New challenges — especially addressing how to prepare employees for an AI-driven workplace — require urgent attention yet remain overshadowed by traditional dialogues.

For example, negotiations over long-haul trucking driver pay will carry less weight when autonomous vehicles arrive in the not-too-distant future. Now is the time for management and unions to talk about how future fleets of autonomous vehicles will be managed remotely, how to train today’s drivers to fill this role, and how to develop training programs for the operators, mechanics, and supervisors of tomorrow.

Failing to address challenges like these makes the transition to the workplace of the future much more difficult to navigate. Moreover, labor relations will become even more rancorous if unions keep fighting against adopting algorithms and automation technologies. Companies will come under increasing pressure to automate as competitors reap the benefits of innovation. Union representatives will feel pressure from members scared of AI’s impact on their employment prospects to be more militant even as their companies lose ground to more technologically savvy competitors.

The signs of such confrontations are already in evidence. Consider, for example, how certain North American ports need to catch up to ports in Asia and Europe in the race to deploy automation to improve competitiveness. The recent stoppages at Vancouver and Los Angeles ports are symptomatic of a failure to confront the need to embrace tech-driven change.

Redrawing the Employment Map

Fighting against the advance of AI and other innovations is a losing battle. Ignoring it is just as futile. Rather than using corporate failures such as the Yellow bankruptcy as an excuse to double down on increasingly outmoded negotiating tactics, management and unions should use these failures to spur change in the workplace. Unions may want to moderate short-term demands for gains such as pay increases and improved benefits. Instead, they can use their negotiating power to force employers to invest in upgrading workers’ skills, offer new education and training programs, and install technology at a measured pace that allows workers and machines to learn to work together and contribute to an integrated human/machine workforce.

The advance of AI can cost jobs and weaken workers’ rights in the short term. However, new employment opportunities will emerge in the medium to long term, and the need for different skill sets will become apparent. Employees, companies, and governments can use the time now to start planning for the new economy.

It is the job of management and employee representatives to map a future in which workers and AI are integrated into seamless workflows, guaranteeing workers’ employment and commercial success for companies.

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