Falcon Transport drivers told to cease driving immediately after abrupt closure

Photo: Falcon Transport Co.

Drivers for the flatbed truckload carrier Falcon Transport of Youngstown, Ohio, said they received emails late April 27 stating the company was shuttering operations effective immediately.

The carrier has 723 trucks and nearly 585 drivers, according to the Federal Motor Carrier Safety Administration’s SAFER system.

Jayson Calhoun, director of operations of Falcon, confirmed the abrupt closure to FreightWaves early April 28 but provided no further details.

One Falcon Transport driver said he and other drivers received a message from Calhoun around 8 p.m. on April 27 instructing them to stop any work for the company “immediately,” but he hasn’t been able to confirm additional information about the closure.

The driver told FreightWaves late April 27 that he is headed to his delivery destination: the GM Plant in Arlington, Texas. He said his fuel card is still working, and he received his paycheck on April 25.

Another driver confirmed that he received the same message but did not get paid this week because of a “computer glitch.” He also received an email from his dispatcher telling him that “Falcon is done.”

This message was posted on Facebook and YouTube late Saturday night:

https://youtu.be/RX1ADQNuVGc

“All Falcon Employees: We regret to inform you that Falcon Transport Co. is not able to continue operations and will be shutting down effective today. Please stop work you are doing for the company immediately. You are not expected to return to work. Please be on the lookout for further information we will be sending regarding the situation.”

Falcon was purchased in a leveraged buyout by CounterPoint Capital Partners, a California-based Private Equity group. According to Pitchbook, Falcon was bought in a leveraged buyout for $27 million in September 2017, with an additional $33 million in debt financing, for a total of $60 million.

Chart: (SONAR AUTO.CLE) Auto production in the region where the company was based. in March 2015, the region produced 33,149 cars. In February 2019, this was down to 13,382 cars.

Falcon Transport had significant exposure in the automotive sector, with General Motors being a primary account. Last December, General Motors announced it would cease production at its Lordstown, Ohio, plant, a major client for Falcon Transport, according to news reports at the time. The plant stopped production of the Chevy Cruze in late March.

On social media late Saturday, people commented on the similarities between this case and the sudden overnight shuttering of another flatbed carrier, Arrow Trucking of Tulsa, Oklahoma, that ended operations a few days before Christmas in 2009. According to reports about the Arrow Trucking shutdown, drivers found out that the carrier had suddenly ended operations when their fuel cards failed to work, with no warning. Nearly 1,400 drivers were left stranded without fuel or money to get back home. It turned out that the CEO of the company had been involved in a $25 million embezzlement and tax evasion scheme that resulted in Doug Pielsticker, chief executive of Arrow Trucking, being sentenced to 7.5 years in prison.

“It is hard to know what caused the sudden closure of Falcon Transport, one of the largest flatbed operators in the country, but the automotive sector has slowed down significantly in recent months and domestic auto manufacturers have shifted from making sedans to large trucks,” said Craig Fuller, chief executive of FreightWaves. “There has also been some consolidation among production plants, as the major car brands struggle to fight changing consumer tastes towards larger trucks and SUVs, less demand among urban dwellers and younger adults, and increasing costs due to tariffs and cross border supply-chain disruptions.”

The company was posting ads for drivers on Twitter as late as April 24 and had posted photos of the opening of its new office in Cedar Hill, Texas, around two months ago.