Yellow Corp, a major trucking company based out of Nashville, has filed for bankruptcy after receiving a staggering $700 million from taxpayers during the COVID-19 pandemic. Their bankruptcy filing has raised concerns for taxpayers who have been financially burdened by the company’s misuse of funds. The bankruptcy also poses a threat to the economy, with the cost of certain goods likely increasing significantly. To add insult to injury, the company’s closure means that 30,000 workers have lost their jobs.
Yellow Corp’s CEO, Darren Hawkins, released a statement confirming the company’s closure., “It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business,” he said. “For generations, Yellow provided hundreds of thousands of Americans with solid, good-paying jobs and fulfilling careers.” Though his statement painted Yellow Corp in a positive light, many taxpayers would disagree with the CEO’s glowing assessment of the company’s reputation in recent years.
The freight company, which had been in business for nearly a century before going bankrupt, has brushed off accountability for their failures by blaming union negotiations and other extenuating factors for their inability to make payments. Yellow Corp had been in a longstanding battle with the Teamsters union, which represented 22,000 of their 30,000 employees. Just months ago, the union sparred with Yellow Corp after the company failed to pay pension and health insurance funds. The union threatened a strike, but ultimately allowed Yellow Corp more time to make the payments. Though the company claims to have been doing just fine until recently, Yellow Corp has been visibly struggling to stay afloat for quite some time.
The company that was once an industry leader in the U.S. started showing signs of trouble in 2004. Yellow Corp began taking in billions of dollars in debt and never fully recovered from the financial loss. Over time, Yellow Corp was faced with lawsuits and floundered to survive.
In 2018, Yellow Corp was sued by the Department of Defense for overcharging on the cost of shipments. “Knowingly overcharging the government is an affront to American taxpayers, and the Department of Justice will seek to ensure that those who engage in such misconduct are held accountable,” said Assistant Attorney General Jody Hunt.
Things only got worse for Yellow Corp as the years went on. The pandemic was a trying time for the whole, and businesses big and small took a bit hit financially. In 2020, Yellow Corp was generously granted $700 million in “taxpayer-funded loans” while the economy was almost completely shut down. The federal program to give businesses money funded by taxpayers has long been a subject of scrutiny. In 2021, an inquiry was launched into the large payment that Yellow Corp received.
Yellow Corp claims that the company will be able to pay some percentage of the money it owes to creditors, vendors, suppliers, and even employees once the court approves their request. But with bankruptcy, nothing is guaranteed, and the $700 million debt relief from taxpayer funds is already long gone.