“I’m walking our dock just because it’s quite possibly our last time,” a worker in Richland, Miss., posted in a TikTok video that showed a deserted terminal. Several commenters said that they, too, had been let go, some after decades with the company, which was once the nation’s largest freight carrier, with some 300 facilities and a fleet of 12,700 tractors and 42,000 trailers.
“Got the call just before noon today,” one of them wrote. “This is awful.”
In a news release Sunday, Yellow chief executive Darren Hawkins expressed “profound disappointment” over the closure: “Today, it is not common for someone to work at one company for 20, 30, or even 40 years, yet many at Yellow did. For generations, Yellow provided hundreds of thousands of Americans with solid, good-paying jobs and fulfilling careers.”
Questions remain about how the Treasury Department plans to recoup the $729.3 million that Yellow still owes the government following a controversial coronavirus relief loan made by the Trump administration in 2020.
Experts say it’s unclear whether taxpayers would get back any money at all. The government would be in a weak position in bankruptcy court because the Treasury stands behind other creditors to recoup one part of the loan and is entitled only to trucks and trailers purchased with another part. And the 30 percent equity stake that the Treasury received in return for granting the loans is probably “worthless,” Adam Levitin, a law professor and bankruptcy expert at Georgetown University, wrote in a blog post on Wednesday.
“There’s no way to sugar coat this: Treasury’s screwed on the Yellow loans,” Levitin added.
A congressional report published in June found that the loan’s certification was marked by missteps and risked losses to taxpayers — even amid government’s frenzied effort to keep the U.S. economy from sinking in the thick of the pandemic. Although the company has made some $68 million in interest payments as of July, it has not made a dent in the balance — delivering just a single $230 payment toward the principal amount, according to a recent Treasury report.
But Yellow’s troubles predate the pandemic, stretching back years, analysts say, beginning with acquisitions in the 2000s that weren’t properly integrated into its business. That resulted in inefficiencies and financial struggles: Yellow has recorded annual losses most years since 2007. And those shortfalls led to tensions with the union over wages and benefits, culminating in the company’s implosion and the complicated efforts to refinance $1.3 billion in debt due in 2024.
Hardest hit will be the displaced workers, who will be competing for jobs during an ongoing freight recession as consumers return to pre-pandemic shopping habits and demand for deliveries of electronics, apparel and furniture cools. Drivers have been bailing on the industry in big numbers, a marked contrast from just two years ago, when the White House mobilized to attract more people into the profession with paid apprenticeships and outreach to military veterans.
That said, the freight market is still “very good” compared with the pre-pandemic freight market, according to Bruce Chan, a transportation-sector analyst at the investment banking firm Stifel. He points to a strong job market more broadly.
“It’s a tragic loss of jobs,” Chan said. “But for the most part, [these workers] have more opportunity than previous freight recessions to find some sort of alternative employment.”
Aaron Schaffer contributed to this report.
