After $700 Million U.S. Bailout, Trucking Firm Is Shutting Down

WASHINGTON — Yellow, the beleaguered trucking company that received a $700 million pandemic loan from the federal government, notified staff Friday that it is…

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After $700 Million U.S. Bailout, Trucking Firm Is Shutting Down

Yellow Corp. trucks and trailers are pictured at a YRC Freight facility Friday, July 28, 2023, in Richfield, Ohio. After years of financial struggles, Yellow is reportedly preparing for bankruptcy and seeing customers leave in large numbers — heightening risk for future liquidation. (AP Photo/Sue Ogrocki) (ASSOCIATED PRESS)

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Alan Rappeport Updated Sat, July 29, 2023 at 11:36 AM PDT·3 min read

WASHINGTON — Yellow, the beleaguered trucking company that received a $700 million pandemic loan from the federal government, notified staff Friday that it is shutting down and laying off employees at all of its locations.

The move comes before an expected bankruptcy filing by Yellow in the coming days. The closure of the company would mean the loss of approximately 30,000 jobs and mark the end of a business that just three years ago was deemed so critical to the nation’s supply chains that it warranted a federal bailout.

“The company is shutting down its regular operations on July 28, 2023, closing and/or laying off employees at all of its locations, including yours,” the company said in a memo to staff that was reviewed by The New York Times.

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Yellow has been locked in protracted labor negotiations with International Brotherhood of Teamsters over a new contract that the company has said is essential to its ability to move forward with a restructuring plan.

As of the end of March, Yellow’s outstanding debt was $1.5 billion, including about $730 million that is owed to the federal government. Yellow has paid approximately $66 million in interest on the loan, but it has repaid just $230 of the principal owed on the loan, which comes due next year.

Yellow is one of the largest freight trucking companies in the United States, and its downfall could have a ripple effect across the nation’s supply chain. Its impending bankruptcy comes days after UPS reached an agreement with the union representing more than 325,000 of its U.S. workers, averting a strike.

Yellow’s management and union negotiators have been trying to reach an agreement over wages and other benefits but failed to clinch a deal.

The fate of Yellow’s assets is not yet clear. In 2020, the Trump administration, which had ties to the company and its executives, agreed to give the firm a pandemic relief loan in exchange for the federal government assuming a 30% equity stake in the company.

Yellow said last month that it sought the assistance of the Biden administration in brokering a deal with the union. The White House had no comment this week on the situation.

A company official said Thursday that Yellow was preparing for “a range of contingencies” but that talks with the union were continuing. On Friday, a spokesperson for the company declined to comment on the firm’s future.

The Teamsters on Friday warned in a letter to local unions representing Yellow workers that the likelihood of the company’s survival was “increasingly bleak.”

“We recommend that all Yellow employees who have personal belongings and tools at the terminals should take them home today,” wrote John Murphy, co-chair of the Teamsters freight industry negotiating committee.

As Yellow’s bankruptcy became more likely this week, shippers were diverting freight away from its network and its stock price plunged.

Analysts at the financial services firm Stephens estimated that the company could be burning through as much as $10 million in cash per day. In a note to clients, the analysts said that the lost business and the threat of a strike had left the trucking company “mortally wounded” and that the firm could reach the “end of the road.”

Financial woes at Yellow, which previously went by the name YRC Worldwide, have been building for years.

In July 2020, the Treasury Department announced it was giving a $700 million loan to the trucking company, helping it to stay afloat. But the loan immediately raised questions, in part because the firm was struggling financially and was being sued by the Justice Department over claims that it had defrauded the federal government for a seven-year period. The company ultimately agreed to pay $6.85 million to resolve those allegations.

c.2023 The New York Times Company

God those Yellow trucks are some pieces of shit. Well they were 20 years ago. I doubt they started taking care of their equipment since then. I hated working on their old White/GMC's and Volvo/Whites. The thing about shitty old machines is that you can't assume anything. So you found a worn out fan clutch? That must be why it's overheating. Nope. It's just one of six reasons. Fuck that company.

Quote from Oaktree

There should be no more bailouts for companies. If they can not manage it correctly, what makes you think they will manage it correctly after bailouts?

I agree.

But what you bootlickers don't seem to understand is this: When you give away as much money and power as possible to corporations, they WILL use the government to give themselves money. After all, a corporation's only job is to get money. It doesn't matter how.

Quote from Gina

Nobody here is for giving away money to anybody, let alone corporations.

I don't know where you even get that from.

I get that from that fact that you vote for politicians who give away money and power to corporations every chance they get in any way they can. When you "cut regulations", by definition you are giving corporations more power. When you cut taxes, by definition you are giving corporations more money. Corporations, by definition, use their money and power to get more money. It's what they are designed to do. The don't give a shit how. They are more than happy to use their money and power to get money from the government. You bootlickers seem more than happy to enable them.

Cuntservatives want to "privatize" every govnerment function. In other words, continue to fund the function with tax dollars, but allow a corporation to pocket some of the cash. That's not a free market system in any sense, but you people pretend it is since it gives away power and money to corporations.

Cuntservative judges decreed that money equals speech. That's an obvious lie, and it's an obvious way to legalize bribery. That's the sort of policy that you bootlickers favor: absolutely anything that gives away more power and more money to billionaires (and the corporations that are largely owned by billionaires). Why in the hell wouldn't they use the power you people gave them to give themselves money directly from taxpayers? You gave them your blessing. If you didn't want them to do that, you wouldn't have given them the power to do that.

Quote from TheDolt

Some of us just want to see you eliminated

Why do you have two usernames? They both sound like feeble little old manlets.

Quote from Gina

You are incredible!

How do you think the government gets money? They don't make any money they get all their money from us.

And when you privatize something it becomes more efficient. It costs us less money. Do you not understand that?

How do you think money exists? How do you think infrastructure exists? How do you think laws exist? How do you think a literate populations exists? We have an entire system that simply would not exist without government. That costs money. Those who benefit the most pay the most. It's really simple to understand if you step outside of your billionaire-worshiping bubble.

Quote from Gina

And when you privatize something it becomes more efficient. It costs us less money. Do you not understand that?

I have worked as a government contractor for several companies. I know a lot more about privatization than you do. It is ultimately a scheme to give away money to corporations. The main way it saves money is by screwing over workers. Turn all of the jobs into temporary contracts with shit benefits and definitely no retirement. So boomers like Spaz retire with cushy government benefits while younger workers like myself get bullshit temporary jobs with no security and no retirement.

It also doesn't save nearly as much money as claimed. In many cases it is funded by other government resources that aren't taken into account. For example: I knew a lot of guys who got out of the military so that they could get a good paying contractor job like I had in Crapistan. In the short term it paid a lot better. But in the long term it allegedly cost the government a lot less because they didn't have to train us or pay for our retirements. But they did train many of us before we got out of the military. So it is sold as a program that saves money because you don't have to train people, but in reality many of those people are trained by a different govenrnment program. Also, a lot of those guys got out with a service-connected disability. So they are recieving a retirement check for life, while they also suck up that nice contractor check. So it's not saving the taxpayers any money in reality. Just on paper. But it sure does a good job of funding Dyncorp, Lockheed, KBR, BAE, etc.

Privatization is a scam. Naturally. It's just the usual bill of goods sold to our Gullible Retards. You morons will support literally anything that gives away more money and power to billionaires and the corporations that they own.

Quote from TheDolt

There is a free ride in your future.

I know. Thanks for funding the service truck I drive for work. It's pretty nice, but I would have preferred a crew cab. Let's try to make that happen in a couple years when it's up for replacement.