Consolidated Freight picked Labor Day to lower the boom on its union employees. All across the country, as Teamsters members reported to work for the holiday weekend, they found shuttered terminals. In several locations their truck barns had been blockaded with big rigs to prevent workers from entering. Word quickly spread to call the company’s 800 number for a message from the company.
“Thank you for dialing in on this holiday weekend. I hope you and your family are enjoying the time together. … I have some extremely urgent and sad news to share with you today. … Your employment ends immediately.” That was the telephone message they got from Consolidated CEO John Brinkco.
Carlos Ramos, a teamster in Harrisburg, Pa., said of the phone message, “That’s like telling your wife you’re getting divorced on Valentine’s Day.” It is estimated that Pennsylvania alone will lose from 1,000 to 1,500 jobs in the shutdown.
Close to 15,500 workers were fired without warning as Consolidated filed for Chapter 11 bankruptcy protection.
While Chapter 11 is usually used to protect assets while a company reorganizes to continue business, in this case Consolidated has made it clear in bankruptcy court that it plans a total liquidation. About 14,500 of those employees are members of the Teamsters union.
Consolidated is the third-largest LTL (less than a load) long-haul trucking company in the country. It carries approximately 15 percent of the nation’s long-haul freight. LTL trucking companies specialize in consolidating smaller shipments into full-sized trailer loads. Consolidated has huge holdings, including nearly 300 major terminals and 30,000 vehicles, including trucks and trailers. It also has extensive real estate holdings.
Many Teamsters are very suspicious of the timing of the shutdown. In 1996, Consolidated split the company into two different companies to separate its union and non-union divisions. Consolidated has only closed and filed for bankruptcy in its union divisions. The non-union spin-off, Con-Way, of Ann Arbor, Mich., will continue operations as usual.
The union has said it will fight for a complete investigation into the last few years of operation of Consolidated to determine if the bankruptcy is a deliberate scheme to escape union representation. Union officials say that Consolidated management resisted union efforts to have discussions on ways to save the company. The Teamsters have successfully held such talks with other trucking companies and helped with cost-cutting measures that do not violate the terms of its union contracts. Consolidated had reported millions in losses in the last seven quarters of operations.
This week the bankruptcy court allowed Consolidated’s management to borrow $95 million to help with the company’s liquidation. This allows the company to hire back some employees for a couple of weeks to finish deliveries of shipments that were stranded by the sudden shutdown.
Although $45 million will be used to pay the last two weeks’ paychecks for the workers, other money owed them, including vacations and workers’ compensation payments, will be added to the company’s creditors list. This means that it could be years, if ever, before workers are paid.
In the past few years several major long-haul trucking companies have closed, including Preston Trucking, Nationways and Advance. Many industry analysts say that the Consolidated shutdown is closely related to the continuing weakness in the economy, as manufacturers cut back production.
Meanwhile, the Consolidated shutdown has brought angry responses and emergency demands from elected officials. Rep. Stephanie Tubbs Jones (D-Ohio) issued a statement saying, “I am disappointed with Consolidated Trucking Corp.’s handling of this matter and am calling on the company executives to assist these workers with outplacement costs such as health insurance and living expenses.”
Likewise, Pennsylvania Gov. Mark Schweiker ordered his labor department to assist fired Consolidated workers to get their full back pay and benefits. Going even further, the State of Wisconsin sued Consolidated for violations of the state’s anti-plant closings laws. The suit seeks damages from Consolidated for failure to give the legally mandated prior notice and for monies owed the workers.
Scott Marshall is a vice chair of the Communist Party USA and chair of its Labor Commission. He can be reached at email@example.com