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99-year old trucking company Yellow shuts down, putting 30k out of work

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Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#21

Post by jklinger410 »

justrealist wrote: post #13
jklinger410 wrote: post #3

Earlier quoted context omitted.

They walk away with the profit because that's how this country works. Business owners have little to no risk when the company gets large enough. Edit: YELLOW is publicly traded and is going into bankruptcy. They posted positive earnings and their CEO got his bonuses last year. I'll let you all guess whether their leadership team gets their full comp for 2023 or not, while all the employees are told to pound sand.

They walk away with $0 in equity.

They have filed for bankruptcy, so leadership will still likely get their compensation packages.

I'm not going to waste time doing the research, but I would assume leadership had been receiving all of their usual comp and bonuses right up until the end as well.

The workers will get $0.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#22

Post by EMM_386 »

"The closing is bad news not only for its employees and its customers, who generally used Yellow because it offered some of the cheapest rates in the trucking sector."

Perhaps they shouldn't have offered the cheapest rates in the trucking sector while failing their obligations.

Taxpayers ended up holding 30% of this company's stock and they still couldn't figure out how to become profitable after a $700 million infusion?

This race-to-the-bottom stuff is not the answer. The answer is to charge what it costs you to deliver plus a profit. If you can't compete directly on price make up for it in service and reputation.

People will blame unions because the company had to fund pensions and health insurance. It likely will come back as a private company with lower pay, worse benefits, and maybe if people are lucky a 401k.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#23

Post by SoftTalker »

koolba wrote: post #17
sizzzzlerz wrote: post #2

So 30000 people lose their job and the US taxpayer is out more than $700 million in loan guarantees. The only question remaining is how much money do the owners of the company walk away with?

The owner’s equity would be wiped out to zero. And 29.6% of the company is owned by the USA as part of that Covid era loan. The real story here is the non union shops eating Yellow and the other union shops lunch. Government loans just kept it alive to die a slower death.

Yes, government bailouts of private companies really need to stop. It just prolongs the problem and doesn't allow the market to properly respond to risks and rewards.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#24

Post by djbusby »

sizzzzlerz wrote: post #2

So 30000 people lose their job and the US taxpayer is out more than $700 million in loan guarantees. The only question remaining is how much money do the owners of the company walk away with?

CEO was making close to $1M/yr for a few years.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#25

Post by throwawaysleep »

enjoylife wrote: post #8

I hope there will be a HBR or some other case study done on Yellow, because the interplay between bad loans + union demands + poor management seems like something US businesses need to be more prepared for.

[flagged]

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#26

Post by boeingUH60 »

cobrabyte wrote: post #19
paxys wrote: post #11

> The company received a $700 million loan from the federal government in 2020, a loan that resulted in taxpayers holding 30% of its outstanding stock. And the company still owed the Treasury department more than $700 million according to its most recently quarterly report, nearly half of the long-term debt on its books. Let's see what people who routinely rant about government bailouts have to say about this. I pred…

> taxpayers holding 30% of its outstanding stock. It's always amusing that they frame this as the lowly taxpayer holding stock in a company after the government bails a company out. I've never received the stock certificates, and I certainly don't see any dividends or have the ability to sell my commensurate portion of the stock holdings. The taxpayer pays for the bailouts but does not see any benefit for doing so.

Not a fan of government bailouts or funding any company at all nor an American, but this framing is weird.

Citizens don’t get dividends from government property. They get their tax benefits from government services, e.g, infrastructure, healthcare, police, etc.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#27

Post by atourgates »

no_wizard wrote: post #14
enjoylife wrote: post #8

I hope there will be a HBR or some other case study done on Yellow, because the interplay between bad loans + union demands + poor management seems like something US businesses need to be more prepared for.

From the sounds of it, its mostly the bad loans + poor management part that killed Yellow. Management of the company have been asleep at the wheel for some time now, union demands are not likely the precipitating factor here. EDIT: All I'm pointing out here is that I don't think this can land squarely on union demands, which is what I think some of the press are making it out to be. The actual financial mismanagement…

It doesn't seem like the "union demands" killed the company narrative tracks here, since the union demands were things like "You should actually make the contributions to our retirement accounts that you're obligated to make."

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#28

Post by bryanlarsen »

riffic wrote: post #16
LazyMans wrote: post #10

Earlier quoted context omitted.

Not defending how our stuff is set up, but it would be interesting to know how much taxes Yellow paid over it's lifetime. Excluding taxes paid by employees.

courtesy note, but the apostrophe in it's will usually expand to "it is".

Mnemonic hint: "his" doesn't have an apostrophe and "he's" does, and the parts of speech match.

Re: 99-year old trucking company Yellow shuts down, putting 30k out of work

#29

Post by sidewndr46 »

dymk wrote: post #12

The company was an unmitigated shitshow for a long time, and didn't perform its basic duties as a shipper. I've had LTL shipments lost for weeks at a time with nothing but a shrug and an "It'll (maybe) get there when it gets there". So it doesn't surprise me at all that they couldn't reach an agreement with their labor.

Sounds like Schroedinger's shipment. If we don't know where it is, can it really be lost?
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