Yellow Transportation Firm: Three years ago, amid financial turmoil and near bankruptcy, the Yellow transportation firm sought Covid epidemic relief loans under the Trump administration. Despite opposition from the Defense Department, the loans were granted, leading to a contentious situation.
However, recent developments indicate that Yellow has struggled to meet its obligations. In May, the company made a payment of $230 million out of the $729.2 million owed to the U.S. Treasury for these loans, as revealed by a federal inspector. A single payout was recorded in June 2021.
The situation has escalated further with the Teamsters Union, representing Yellow’s employees, condemning the company’s handling of its Covid debt. Teamsters General Union president, Sean M. O’Brien, expressed concerns over Yellow’s management capabilities, despite the company receiving billions from both its employees and the government.
On Friday, a somber announcement from Yellow’s staff signaled the closure of the freight company. The Teamsters predict a grim outlook, including an anticipated bankruptcy and a devastating 30,000 layoffs, making it one of the most significant failures in the trucking industry.
The controversy surrounding Yellow’s Covid relief loan goes back to July 2020 when the Trump administration loaned the company, previously known as YRC Worldwide, $700 million under the CARES Act. While the act allowed funding for vital national security purposes, 95% of the CARES Act funds were loans, and Yellow repaid only 30% of the loaned amount to the government.
READ MORE: Samsung Galaxy A14 LTE: Budget Beauty Samsung Galaxy A14 LTE Packs a Surprise Punch
In April 2022, House members expressed their disapproval of the debts, pointing out that the Defense Department officials had not deemed Yellow’s loan essential for national security. However, the loan had been approved, and questions arose about the role of individuals within the Trump administration, including Donald Trump himself.
Documents indicate that Trump’s top adviser, Mark Meadows, had plans to discuss Yellow’s loan application with then-Secretary of the Treasury, Steven Mnuchin, in May 2020. The panel investigating the matter noted that Secretary Mnuchin’s statements suggested President Trump’s desire for the loan to be authorized.
Notably, Secretary Mnuchin even shared a CNN piece regarding Yellow’s loan with Chief of Staff Meadows and the president’s personal assistant on the day the Treasury announced it. The CNN statement mentioned a union representative congratulating President Trump for the loan just months before the 2020 presidential race.
Adding to the controversy, Yellow faced accusations of misusing Defense Department funds by overcharging for shipping services, leading to a settlement of $6.85 million in March 2022.
In conclusion, the Yellow transportation firm finds itself embroiled in a complex and contentious situation surrounding its Covid relief loans. With significant debt owed to the U.S. Treasury and mounting challenges, the company’s future appears uncertain, casting a shadow over the trucking industry and raising questions about the loan’s approval process under the Trump administration.
Our Reader’s Queries
Why did Yellow Trucking company shut down?
Yellow Corp, a major trucking company in the U.S., has officially filed for bankruptcy. This comes after a tense disagreement with the Teamsters Union and despite receiving a large federal loan during the pandemic. The company’s debt continued to grow, leading to this decision.
Who is the parent company of Yellow trucking?
YRC Worldwide rebranded in 2006 after making international investments. The parent company, Yellow Roadway Corp., which owns Roadway, Yellow, and other subsidiaries, decided to change its name to YRC Worldwide.
Does yellow freight still exist?
After almost a century in business, we are deeply disappointed to announce that we have closed our doors and filed for Chapter 11 bankruptcy on August 6th, 2023. This marks the end of an era for our company.
Who is taking over Yellow Freight?
XPO emerged as the victor in a court-supervised auction, where around twenty companies, such as Estes Express Lines and Knight-Swift Transportation Holdings (KNX. N), battled for the rights to buy Yellow’s assets for $1.88 billion, according to a court filing on Monday.