The Labor unions usually defiled as associations of Workers who by means of collective rnBargaining and endeavor to improve their working condilions, economic and societalrnPosilion. This shows that unions to shore Benefils Mainly frome Organizations' suchrnas Profits. But when organizalions operate in loss, undergone major Strurctural changes andrnon Process of Privalizalion the main duty of labor unions will be changed. To assess Luborrnunion aclivilies and challenges in Ethiopian public Enterprises, in which most of them arernoperating in loss mainly in textile and yarn Enlerprises, Addis Abeba yarn share companyrnbasic labor union was selecled based on preliminary Assessmentl, The study used documentrnreview, inlerview and questionnaire as main of data collection. After deep analysis thernsludy idenlified the union is building its Financial capacity by involving in commercialrnactivities. This activity helped to Plan for its members for long run benefits and survival byrnSaving Ihe Company And Its Membersfi'om 10lal/Ailure, Instead 0/ Seeking Benefits ThroughrnCollective Bargaining The Union Gives Away Ihe Rights 0/ Ifs Members To Ihe Organizalion 10rnSave Ihe Company. The Main Challenges O/Ihe Union Being The Poor Pelformance 0/ ThernCompany And Less Qualified And Old Aged Members, The Union Strives To Cope Up With ThernChallenges, The Study Will Benefils Other Public Enterprise Labor Unions To Cope Lip WithrnChallenges(Aced By Labor Iinions And Benefit Their Members In Long And Short Run,