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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
by sizzzzlerz 3y ago
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?
- jklinger410 3y agoThey 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.
- justrealist 3y agoThey walk away with $0 in equity.
- jklinger410 3y agoThey 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.
- justrealist 3y agoThose aren't the owners. And since the bonuses are in stock, those aren't going to be worth anything. > I'm not going to waste time doing the research Yeah that's pretty clear.
- boeingUH60 3y agoYellow is a publicly-traded company. Shareholders are wiped out…such is the risk of investing
- Aurornis 3y agoThe stock is actually up today: https://www.google.com/finance/quote/YELL:NASDAQ https://www.google.com/finance/quote/YELL:NASDAQ That's how broken their financial situation was. Shutting down might allow the shareholders to collect something. Maybe. Note that US Taxpayers are effective owners of about 1/3 of the company due to past loans.
- code_runner 3y agoI believe they are referencing executives not stock owners. I imagine a company like this going out of business is pretty profitable for execs... but thats just me guessing. Its entirely possible that this company was run by the few executives with souls and a sense of actual responsibility
- deleted 3y ago[deleted]
- ineedasername 3y agoSeems it gets worse than that: "In April 2022, Democrats on the Congressional Select Subcommittee on the Coronavirus released a report claiming the loan violated the terms of the CARES Act, and that it resulted from lobbying and close connections with former US president Donald Trump. YRC reportedly got the loan on national security grounds, over the objections of the Defense Department that the company's services could be replaced by better providers, and that the company was in the middle of a False Claims Act in which it was accused of overbilling the government and making false statements." https://en.wikipedia.org/wiki/Yellow_Corporation https://en.wikipedia.org/wiki/Yellow_Corporation
- throwawaysleep 3y agoThey went to zero. https://www.google.com/search?q=yellow+trucking+stock&rlz=1C1GCEA_enCA983CA983&oq=yellow+trucking+stock&aqs=chrome..69i57j0i512j0i22i30l8.2979j1j7&sourceid=chrome&ie=UTF-8 https://www.google.com/search?q=yellow+trucking+stock&rlz=1C...
- tibbon 3y agoAre there likely Golden Parachutes in this scenario?
- LazyMans 3y agoNot 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.
- riffic 3y agocourtesy note, but the apostrophe in it's will usually expand to "it is".
- bryanlarsen 3y agoMnemonic hint: "his" doesn't have an apostrophe and "he's" does, and the parts of speech match.
- SoftTalker 3y agoI would presume they paid the least they were legally obligated to pay, as any normal person or company would do. Trucks also pay a lot of road use taxes. Some would say not enough, but trucking is not a low-taxed line of business.
- LazyMans 3y agoIt would be interesting to see the net benefit a company had. Obviously putting money in employee pockets is a net benefit, but it stops being so great if tax dollars are just subsidizing bad business leading to a net drain on tax payers
- SoftTalker 3y ago"tax dollars are just subsidizing bad business" is the definition of most bailouts.
- breakingrules 3y ago[dead]
- koolba 3y agoThe 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.
- SoftTalker 3y agoYes, 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.
- nickff 3y agoThis bailout was not for the shareholders, it was for the union (as is often the case). Bailouts usually benefit creditors, not the equity holders. edited for clarity
- SoftTalker 3y agoWhy should creditors get bailed out? If they do, they'll keep making risky credit decisions. If they get burned, they'll be more careful next time.
- nickff 3y agoI don't think they should get bailed out, but to be clear, being 'burned' means being laid off, with an end to wage payments, and no severance.
- djbusby 3y agoCEO was making close to $1M/yr for a few years.
- audibahnbacks 3y agoTotal comp was over $2m/yr for the past several years, and the C-suite execs were each earning $1m-$6m the past several years, even the CTO. It’s another case of public losses, private profits.
- ApolloFortyNine 3y agoIf that's it thats honestly on the low end for a company of that size.
- jl6 3y agoI’m not making any statement on whether that CEO did a good job or not, but I’d like to point out that if you had a failing company, it might make a lot of sense to hire an expensive hotshot CEO to turn it around (and to get the best you would also offer benefits like golden parachutes). So it’s not necessarily a case of “the CEO is getting paid exorbitantly to do a bad job”.