• ITVI.USA
    15,839.740
    -5.440
    0%
  • OTLT.USA
    2.799
    -0.007
    -0.2%
  • OTRI.USA
    22.070
    0.480
    2.2%
  • OTVI.USA
    15,836.590
    -10.170
    -0.1%
  • TSTOPVRPM.ATLPHL
    2.950
    -0.570
    -16.2%
  • TSTOPVRPM.CHIATL
    3.610
    0.650
    22%
  • TSTOPVRPM.DALLAX
    1.370
    -0.240
    -14.9%
  • TSTOPVRPM.LAXDAL
    3.550
    0.210
    6.3%
  • TSTOPVRPM.PHLCHI
    2.320
    0.220
    10.5%
  • TSTOPVRPM.LAXSEA
    4.110
    0.250
    6.5%
  • WAIT.USA
    126.000
    0.000
    0%
  • ITVI.USA
    15,839.740
    -5.440
    0%
  • OTLT.USA
    2.799
    -0.007
    -0.2%
  • OTRI.USA
    22.070
    0.480
    2.2%
  • OTVI.USA
    15,836.590
    -10.170
    -0.1%
  • TSTOPVRPM.ATLPHL
    2.950
    -0.570
    -16.2%
  • TSTOPVRPM.CHIATL
    3.610
    0.650
    22%
  • TSTOPVRPM.DALLAX
    1.370
    -0.240
    -14.9%
  • TSTOPVRPM.LAXDAL
    3.550
    0.210
    6.3%
  • TSTOPVRPM.PHLCHI
    2.320
    0.220
    10.5%
  • TSTOPVRPM.LAXSEA
    4.110
    0.250
    6.5%
  • WAIT.USA
    126.000
    0.000
    0%
BusinessDriver issuesFinanceNewsTrucking

In urging a “yes” vote, Teamsters spells out how Jack Cooper got into such trouble

In a document leading up to the vote by members of the International Brotherhood of Teamsters union on a new contract viewed as vital to the survival of auto hauler Jack Cooper, the Teamsters spellsout in great detail just what happened to the company and its need to file for protection under Chapter 11 of the bankruptcy code.

The agreement with the Teamsters is one part of the reorganization plan and Teamsters leadership has urged its members to vote in the affirmative. The voting takes place September 6-9. The new contract holds wages and benefits in place.

In a Q&A document posted late last week for its members, the union’s leadership discusses in stark detail how Jack Cooper has come to the situation it finds itself in.

The Q&A says Jack Cooper has suffered a “significant” loss of business since 2017, “with much of that coming over the past 12 months.” The Big Three auto manufacturers have sought to diversify their carrier pool, and Jack Cooper has suffered from that goal, according to the document.

Jack Cooper bought Allied Systems in 2013 for $135 million, making it the largest auto carrier in the U.S. And since then, according to the Q&A, “Jack Cooper has struggled, undergoing a series of highly noticeable refinancings that have only moderately addressed its debt load. Those minor attempts to reduce its debt caught the attention of customers and gave them yet another excuse to move work away from Jack Cooper.”

In announcing its restructuring plans, Jack Cooper said a capital infusion by junior lender Solus Alternative Asset Management would allow it to purchase new trucks. And the age of its current fleet is an issue, according to the Teamsters. 

“Those older trucks cannot haul the same capacity as a newly configured piece of equipment,” the document says. “The difference between a profitable load and a loser is often less than one car or truck being hauled.”

General Motors, according to the document, has been hiring non-union carriers at most of its “non-plant” locations, like railheads. “This also means that GM is giving no rate increases to car-haulers and often demands rate cuts just to keep the business,” according to the Q&A. “Jack Cooper rarely if ever is competitive on bidding on new work due to its cost structure.”

And in a startling admission for a union, the Q&A goes on to say that “all the old rules of ‘union built and union hauled’ have been thrown out the window and union car-haulers are suffering as a result.”

Jack Cooper tried to reduce its dependence on the Big Three, according to the Q&A. But most of its new ventures “didn’t pan out.” And as the document dryly notes about the people who pushed these new initiatives, “some of them no longer work for the company.”

 Through a spokeswoman, Jack Cooper declined to comment on the Teamsters document.

A new contract between the Teamsters and Jack Cooper is part of the restructuring. The Teamsters, just before Jack Cooper filed for Chapter 11 protection, said it would not impact wages. At the time of that announcement, there were few other details of the contract.

But the Teamsters document reviews several more details of the pact, including a provision allowing “purchased transportation.” As the Teamsters posed the question, “The ‘purchased transportation is new and generally not used in car-hauling to my knowledge. Why is it necessary and won’t it eliminate some jobs?”

The response is that the “work preservation” provisions in the master agreement covering car haulers is “very tight.” The response also states, “The sole purpose of this new section is to allow the new company to try to protect its existing contractual business when there are plant holds or production surges.”

The explanation goes on to say that demand for car-haulers created by production spikes now are usually assigned to non-union carriers. By allowing Jack Cooper to utilize purchased transportation, “(the company) will be able to designate what loads must be given away. They can keep the high revenue loads and give the less profitable to the purchased transportation provider. This reduces the revenue to our non-union competitors and keeps the brokerage fee within the company.”

If the rank and file votes down the contract, the Teamsters’ document says they expect overflow business to go to non-union carriers. 

“We hope and expect that the manufacturers will get some satisfaction from the fact that new Jack Cooper will be a much more financially stable company going forward and be better able to provide good service with new equipment in the years to come,” the Q&A said. “If this is rejected, this will likely result in the business being shut down and its assets liquidated.”

Notably, the Teamsters for a Democratic Union (TDU), a dissident group within the Teamsters, does not appear to be opposing the contract. In a post on its webpage, the TDU raises questions about some of the voting procedures but does not appear to be recommending a “no” vote.

In an earlier statement about the Jack Cooper-Teamsters agreement, the TDU identified six locals that opposed the deal, but said the majority of locals had voted to recommend it to its members. 

Under the terms of the agreed-upon plan, junior lender Solus will own 100 percent of the stock of the “new” Jack Cooper. It is the entity that will be investing in the new company to allow the purchase of new equipment.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.

4 Comments

  1. Well this couldn’t happen at a better time as the UAW is sitting down with the big 3. UAW should demand that cars built by union workers should be hauled by union workers.
    IBT should be calling the UAW

    Glad to hear it’s a freeze of wage benefits not a 15% and no pension oops 10 years ago still stings .

  2. Freight Teamsters went through the same process. Wage freeze or the 15% give back and no pension. Labor has become such pussies. Tell them to fuck them selves and close the business. Let the new non union companies pay for the crush and dent of the new cars. Same ole crap

  3. I worked for Jack Cooper many many years ago in Oklahoma City, and of course lost my job when GM moved out of Oklahoma City. Currently working at 4:00 YRC, and there has been only one consistency in all my years as a teamster…and that consistency is the union is getting weaker and weaker and doing less and less for the members, while asking for more and more dues so they can sit on their fat ass and organize toll booth workers and casino workers instead of the backbone of the teamsters, which are truck drivers. It’s all turning into a big joke, the union is slowly killing itself, until one day it will be no more. James R Hoffa I’m sure is rolling over in his grave looking at what his teamsters have become, a joke, and a bad joke at that.

  4. It’s sad to blame the union(s). Who are the “union(s) ?The union(s) are the members…The members get to VOTE on their representatives all the way from their local officers to the top officers known as the General Executive board. DO YOU VOTE, OR JUST COMPLAIN?
    So HOW can you who bitch about the union? Have you ever look in the mirror and ask yourself question(S)? Did I VOTE every time there was an election in my union? Did I attend local craft or general meeting when I was able to so? Did I get involved in union activities? OR AM I A CRONIC BITCHER ABOUT OTHERS AND SIT BACK AND CRITICIZE?
    THEN DID I VOTE EVERY TIME THERE WAS AN ELECTION FOR POLITICAL OFFICER IN MY STATE AND FEDERAL ELECTIONS WHO WERE LABOR FRIENDLY SUPPORTERS? HERE IS WHERE UNION MEMBERS LOSE MORE WAGES AND WORKING CONDITIONS, SUCH AS HEALTH CARE & (RTW) RIGHT-TO-WORK LAWS THAT ALLOWS “FREE LOADERS” “HITCHIKERS” TO ENJOY UNION NEGOTIATED WAGES AND BENEFITS AND FREE REPRESENTATION WITHOUT PAYING A DAM DIME. TOGETHER WE STAND, DIVIDED & INDIVIDUALLY WE FALL. THAT HERE IS IT IN A NUT SHELL, IS WHAT HAS HAPPENED TO UNIONS IN GENERAL. 99% OF THE TIME THE ONES WHO BITCH THE MOST AND THE LOUDEST ARE THE ONES WHO DO NOTHING TO PROMOTE UNION MEMBERSHIP. IF ALL UNION MEMBERS STOOD TIGHTLY TOGETHER,AND CAMPAIGNED FOR UNION MEMBERSHIP, AND VOTED EVERY TIME AGAINST POLITICIANS WHO ARE ANTI-UNION BASTARDS,
    THE BUSINESS WORLD COULDN’T BEAT THE MEMBERS.
    LASTLY, COMMON SENSE IS A LOST COMMODITY THESE DAYS. GREED, GREED IS SOMETHING UNION MEMBERS AND BUSINESS SHOULD TAKE A GOOD HARD LOOK AT. HOW MUCH IS ENOUGH? ARE WE PRICING OURSELVES OUT OF A JOB? ARE WE COMPETITIVE IN OUR INDUSTRY? COMPARED TO WHAT? HOW ARE WE JUDGING AND COMPARING OUR 1. WAGES, 2. HOURS AND 3. CONDITIONS OF EMPLOYMENT? THOSE LAST THREE (3) ARE THE ONLY THREE (3) SUBJECTS THAT ARE KNOWN AS THE MANDATORY SUBJECT OF BARGAINING ACCORDING TO THE NATIONAL LABOR RELATIONS ACT (NLRA). SO BEFORE YOU GET WAGGING YOUR TONGUE TO LOUDLY, AND ADVERTISING YOU IGNORANCE, OR INTELLIGENCE LEVEL THINK ABOUT ALL OF THIS.
    1. CONFIDENCE: IS KNOWING WHAT ONE IS TALKING ABOUT.
    2. IGNORANCE: IS CORRECTABLE THROUGH EDUCATION.
    3. STUPIDITY: THAT’S FOREVER, AND CAN’T BE FIXED,
    4. STUBBORNESS: IS SYNONYMOUS WITH STUPIDITY!!
    I’M A TEAMSTER SINCE APRIL 1962. AND RETIRED 20 YRS.AGO THANKS TO MY UNION MEMBERSHIP!!!

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