Rescue of Troubled Trucking Company With White House Ties Draws Scrutiny

[Johnboy60]

At a virtual congressional hearing in May, Sen. Jerry Moran, R-Kan., asked Treasury Secretary Steven Mnuchin for help. A struggling trucking company in his state was on the brink of collapse and needed government support.

Eager to assist, Mnuchin assured the senator that “we will look at that specific company and see what we can do and get back to you.”

Rescue of Troubled Trucking Company With White House Ties Draws Scrutiny

 

[wing2000]

Winning! YRC sound's like Trump's kinda of company.

The loan has raised questions of favoritism in part because it appears to flout the Trump administration’s own public assertions that it would not use taxpayer money to prop up individual companies or bail out businesses that were in financial trouble before the pandemic struck. The YRC loan appears to be an exception.

“YRC was already in a precarious position given that they weren’t a very profitable company, they were already losing volume and market share, and they’ve been trying to turn this around forever,” said David Ross, an analyst at the investment firm Stifel. “In normal times when you have a recession, companies that aren’t the best companies go away.”

 

[iluvatar5150]

For those playing along at home, in 2009, Solyndra got a $535m loan guarantee from the feds under Obama's stimulus plan, which ultimately resulted in a $528m loss for the government.
Solyndra - Wikipedia

Adjusted for inflation, that $528m loss in 2009 dollars is worth about $641m today.
CPI Inflation Calculator

The loan in the OP is for $700 million. If YRC goes under, the potential losses are even higher than they were for Solyndra.

 

[cow451]

For those playing along at home, in 2009, Solyndra got a $535m loan guarantee from the feds under Obama's stimulus plan, which ultimately resulted in a $528m loss for the government.
Solyndra - Wikipedia

Adjusted for inflation, that $528m loss in 2009 dollars is worth about $641m today.
CPI Inflation Calculator

The loan in the OP is for $700 million. If YRC goes under, the potential losses are even higher than they were for Solyndra.

Thanks, Obama.

 

[essentialsaltes]

Trump officials overruled Pentagon to approve pandemic loan, emails show
House subcommittee report finds White House and Cabinet officials pushed for $700 million in aid for Yellow Corp.

In 2020, career employees at the Defense Department decided that they should not certify that Kansas-based Yellow Corp. was critical to maintaining national security, which would mean the company could not qualify for a loan program created by Congress earlier in the pandemic, the investigation found. They communicated that decision to the Treasury Department on June 24, 2020, according to emails quoted in the report.

“There are plenty of other trucking companies that do this,” one memo from career staffers said.

But the Trump appointees ignored that determination after a newly revealed phone call between Treasury Secretary Steven Mnuchin and Defense Secretary Mark T. Esper on June 26, 2020, that was set up to discuss “YRC and DOD certification,” according to the Democrats’ report. (Yellow Corp. was formerly named YRC Worldwide.) Esper then certified the company as “critical to maintaining national security” for the purposes of the loan.

Thank heavens Trump fired that Esper guy for being a swamp creature! What bozo put him in charge of Defense!?!

The $700 million loan to Yellow Corp. was by far the largest provided to any company through the program for businesses critical to national security, and the Treasury Department received a nearly 30 percent equity stake in the company in return for the loan.

“I don’t believe this company was eligible for this financing,” Rep. French Hill (R-Ark.), a member of the commission, said in a recent interview, noting that Yellow received the vast majority of the $735.9 million total lent under the national security program. “Ninety-five percent of the money in this pot went to one company that I don’t believe is fundamentally eligible for it.”

There is plenty of blame to go around. Representatives from both parties lobbied on the company's behalf, as did the Teamsters. But the decision-makers are where the buck stops.

 

[NxNW]

For those playing along at home, in 2009, Solyndra got a $535m loan guarantee from the feds under Obama's stimulus plan, which ultimately resulted in a $528m loss for the government.
Solyndra - Wikipedia

Solyndra was one of numerous businesses who received such loans, and most of which returned a profit.

 

[essentialsaltes]

Trump officials overruled Pentagon to approve pandemic loan, emails show
House subcommittee report finds White House and Cabinet officials pushed for $700 million in aid for Yellow Corp.

Bankruptcy becomes official for Yellow freight company; trucking firm going out of business​

A congressional probe recently concluded that the Treasury and Defense departments “made missteps” in the decision and noted that Yellow’s “precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss.”

Oh, well. Easy come, easy go.

 

[wing2000]

Bankruptcy becomes official for Yellow freight company; trucking firm going out of business​

A congressional probe recently concluded that the Treasury and Defense departments “made missteps” in the decision and noted that Yellow’s “precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss.”

Oh, well. Easy come, easy go.

...so I'm guessing the US taxpayer will take the hit and the 30,000 Yellow employees.

It appears Yellow had some serious management issues.


"In the five years through 2022, a period in which trucking boomed, Yellow racked up over $200 million in losses, while Old Dominion Freight Line, also a less-than-truckload company with revenues similar to Yellow’s, reported over $4 billion in profit over the same period."

A Trucking Giant Is Bankrupt, and Finger-Pointing Begins

Yellow, which was lent $700 million in U.S. pandemic relief, failed after being a laggard for years in a part of the industry where rivals are doing well.

www.nytimes.com

 

[essentialsaltes]

Yellow's bankruptcy underscores criticism of Trump-era loan​

Intrigue: Career Pentagon staff opposed the loan, in part due to a pending Justice Department lawsuit against Yellow alleging the company overcharged the U.S. government and then lied about it, but were overruled by then-Defense Secretary Mark Esper, following a private phone conversation with Mnuchin. During subsequent congressional testimony, Mnuchin blamed Esper for certifying Yellow as critical to national security.

• "It was all circular logic at that hearing," Rep. French Hill (R-Ark) tells Axios. "Mnuchin kept circling back to it not being within his discretion and then wouldn't discuss it further."

The loans were made at a relatively low interest rate, with the U.S. government receiving a 29.6% equity stake as theoretical upside. Those shares today are valued at just $57 million as of last Friday, and Yellow had repaid less than $1,000 of its loan.