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Automakers Walkout Won’t Immediately Affect Shipments

June 9, 2008
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A Teamsters strike against the nation’s second-largest vehicle hauler won’t immediately affect deliveries to dealers of General Motors and Ford Motor Co. vehicles, say spokespeople for the two automakers.

Teamsters drivers went on strike against Performance Transportation Services on Monday, June 9. Performance Transportation, of suburban Detroit, hauls light vehicles for almost all of the major automakers that sell vehicles in the U.S., according to the company’s Web site.

GM spokeswoman Deborah Silverman said GM has a plan to make sure cars get to dealerships but declined to give details.

Ford spokesman Todd Nissen said the automaker also had a plan to move vehicles from plants to dealers.

“At this point, we’re not affected by it in terms of having vehicles on their way to dealerships,” he said. Nissen also said there were reports of Teamsters pickets at some Ford plants, including Michigan Truck and Wayne Assembly, both in suburban Detroit.

PTS is responsible for just over a quarter of Toyota’s car hauling business that isn’t handled by Southeast Toyota Distributors or Gulf States Toyota, according to Toyota spokesman Xavier Dominicis. He said Toyota also has a contingency plan in place, but it’s not yet clear how a long work stoppage at PTS would affect the company’s distribution.

“Today’s the first day, so it’s a little early to tell,” Dominicis said.

The strike comes after a U.S. bankruptcy court judge gave the vehicle hauler permission to cut the pay of its union drivers by 15 percent. Performance Transportation CEO Jeff Cornish said in a letter to employees that the pay cut was temporary and that it would let the company meet its “ongoing operational obligations” while it bargained with the Teamsters.

In an affidavit filed Saturday, June 7, supporting a motion asking a judge for a temporary injunction to stop the strike, Cornish said even a one-day strike could cause the vehicle hauler to lose customers and push it to liquidate its businesses. Performance Transportation is under bankruptcy protection. A bankruptcy court judge in Buffalo declined to rule on the motion Sunday, June 8, citing lack of jurisdiction, according to his clerk.

Cornish said customers will likely fall behind in deliveries and those customers already are looking for alternatives.

“I think customers are not going to wait a long time,” he said. “They’re going to do what they have to do.”

Cornish said the hauler, with a fleet of 1,800 trucks, delivers about 2.7 million vehicles each year and brings in about $250 million in sales.

Fred Zuckerman, head of the Teamsters Union’s car-haul division, said PTS management and other workers at the company aren’t being asked to make the same level of sacrifice as the Teamsters. He also slammed the company’s management.

“PTS has been continually declining, and we think that it’s just continuing mismanagement,” he said. “Management has got to change.”

Performance Transportation Services has operated under Chapter 11 bankruptcy protection twice since 2006, last filing in November 2007. The vehicle-hauling business has been hurt by declining shipments in North America and rising fuel prices.

Filed by Andrew Grossman of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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