On Monday, bankrupt trucking company Yellow Corporation announced the repayment of a $700 million loan issued by the U.S. government during the pandemic.
Yellow Repays CARES Loan In Full
LTL carrier Yellow Corporation said on February 5 that the company has fully repaid a $700 million Coronavirus Aid, Relief, and Economic Security (CARES) loan with $151 million in interest. The U.S. Treasury also received 29.6% of Yellow’s stock, totaling 15.9 million shares, worth approximately $72 million.
“This repayment demonstrates Yellow’s absolute commitment to fulfilling its promise to the American taxpayers that its CARES Act loan would be repaid in full with interest,” said Yellow’s Chief Restructuring Officer, Matthew Doheny. “At the time the loan was made, the U.S. supply chain was in danger of collapse and Yellow was proud to have secured its CARES Act loan, which helped Yellow preserve its 30,000 jobs, protect the U.S. economy during the height of the Covid crisis, and ensure that our brave men and women in uniform continued to receive the supplies they needed to defend our great nation.”
During an early December 2023 bankruptcy auction, Yellow sold off about 130 properties for approximately $2 billion.
Teamsters Blast Yellow For Failing To Pay Pensions
Teamsters spoke out against Yellow for repaying the government loan before workers.
“The money Yellow boasts that it’s repaid the federal government is but a fraction of the $5 billion that hardworking Teamsters gave back to this mismanaged company in wage and pension concessions for more than a decade, money that the workers to this day have not seen,” the Teamsters told CNBC.
CARES Loan Controversy
Yellow received the CARES loan in July 2020.
While CARES loans were designed in part to protect companies “critical to maintaining national security” during the pandemic, the loan granted to Yellow was controversial because the Trump administration reportedly overruled Department of Defense officials who said that Yellow was not critical to national security and that other trucking companies could fill its role.
Yellow Blamed Bankruptcy On Teamsters
On August 6, 2023, Yellow filed for Chapter 11 bankruptcy protection and the company shut its doors for good shortly thereafter, wiping out about 30,000 union and non-union jobs.
Yellow was the nation’s third-largest LTL carrier, with 12,000 trucks and 35,000 trailers at the time of the bankruptcy filing. The failure of the 99 year old company was the largest in U.S. history.
Yellow blamed the closure on the refusal of the International Brotherhood of Teamsters (IBT) to agree to the “One Yellow” business plan. The One Yellow plan involved combining the operations of YRC Freight, Reddaway, Holland, and New Penn into a single carrier providing both regional and long haul services. The plan would have required the closing of some facilities and would have converted some drivers into “utility worker” positions that would require local driving and dock work.