Consolidated Freightways

Discussion in 'The Archives' started by moreluck, Sep 2, 2002.

  1. moreluck

    moreluck Guest

    Consolidated Freightways hits the brakes
    Freight hauler laying off 15,000, to file for Chapter 11
    By Anne Stanley,
    Last Update: 7:04 PM ET Sept. 2, 2002

    VANCOUVER, Wash. (CBS.MW) -- The nation's No. 3 long-distance freight hauler, Consolidated Freightways, said Monday it would file for Chapter 11 bankruptcy protection, shut down some of its operations and lay off more than 15,000 workers.

    The company's CF AirFreight and Canadian Freightways subsidiaries are still operating and their employees will not be affected, Consolidated said.

    About 80 percent of the employees to be laid off will receive termination notices immediately, the company said (CFWYE: news, chart, profile), and it will discontinue some operations effective Monday.

    Consolidated said it plans to file for bankruptcy protection on Tuesday. It expects to file its Form 10-Q for the period ending June 30, 2002 at the same time.

    In letters to be mailed to each employee tomorrow, the company said it had "been vigorously exploring ways to restore the financial health of the company. We expected that recent discussions with our banks, other lenders and real estate investors would enable us to obtain significant additional financial resources and that, together with the combined efforts of employees, we would be successful in our restructuring efforts.

    "Unfortunately, this has not been the case. Nor do we have the current resources necessary to sustain the business without additional financial resources."

    John Brincko, CEO of the company, said in remarks to employees that despite the severe restrictions imposed on the credit, insurance and real estate markets since the events of September 11, "and in my very short three months here, I was hopeful that, with the right moves at all the right times, we could be successful in turning the company around."

    Brincko said that until recently, the company hoped it could secure additional financing. However, he said that when one of the company's surety bondholders cancelled coverage related to the company's self-insurance programs for worker's compensation and vehicular casualty, it hurt discussions with all lenders and investors. Ultimately, the company said, it was unable to secure financing and to bridge the surety bond gap, at which point the situation became critical. Moreover, the company anticipated that a second insurer would also cancel coverage.

    "Without the availability of further financing, the board of directors reluctantly concluded that the company simply could not continue to operate, pay employees and meet its obligations," Brincko said.

    CF's fleet includes more than 38,000 tractors, trailers, and other vehicles, and it has about 350 terminals in North America, according to Hoover's Online. In addition to operations in Canada, Mexico, and the U.S., Consolidated provides freight services between the U.S. and more than 80 other countries through alliances with ocean carriers and international partners. CF also provides supply chain management and logistics services and Internet-based air and ocean freight forwarding to 180 countries.

    Shares of Consolidated dropped 4 cents on Friday to end at 71 cents.

    Anne Stanley is a news editor at in San Francisco.
  2. moreluck

    moreluck Guest

    Maybe with this kind of news, all the folks complaining about the new contract should thank their lucky stars that they even have a job. You could be working for CF and be facing a lay off with 15,000 of your "brothers & sisters". Think about it!
  3. wkmac

    wkmac Guest

    I feel for these folks at CF and Brent Caldwell, Teamster spokesperson, expressed sadness in the fact that they viewed the current head of CF in a positive light but felt he was brought in to late to turn the ship around. I view this a positive trend when in the past in situations like this the union is very critical of the head guy. After Hoffa's positive comments about Eskew I'm hopeful a partnership between labor and management will develop rather than the typical head butting.

    However, let's look at this from another perspective.

    We are very fortunate to work for such a strong company and from my point of view UPS could have cut way back, laid people off to boost the bottom line but they did not. UPS choose to stay as fully loaded as they could and for good reason.

    CF was 73 years old which places them among and elite for longevity but they were also #3 is size in the LTL business. That business will now go shopping elsewhere and we could reap the benefits of the CF fallout. I'm sure Logistics will get a share but I also believe the Brownshirts stand to gain the most here. The trucking industry is ripe for consolidation with the union companies being the most at risk here.

    With UPS' international network including Ocean Freight, I really believe that we will benefit greatly from the CF failure but I also believe as more of the trucking industry suffers the same possible fate as CF, UPS has the financial strength coupled with a network of proven service realibility and customer driven features to drive forward in it's Core business. This will really drive the bottom line to the plus side of life!

    Also many of my union brethren view the non-union part of UPS to be a threat but my view is that these subs. offer services that in fact will couple with our Core business and actually make our jobs more secure. JMO based on perspective.
  4. deliver_man

    deliver_man Guest

    You could be working for CF and be facing a lay off with 15,000 of your "brothers & sisters". Think about it!
    We could be working a lot of different places and facing a lot of different situations....but we're not. So what's your point?
  5. moreluck

    moreluck Guest

    deliver man: My "point" is not to make an argument, but just to make an observation about a co. that is very similiar to UPS. IE: long time in business (75yrs.), teamster employees, etc.
    I know you could be "working a lot of different places", but I'm not talking about selling shoes at Payless or flipping burgers at Wendys. I'm just trying to impress on you the blessings that you have by having a job and a good paying job in today's rocky economic climate. If you don't see my point, then I'll just have to "smell a rose" on your behalf. Just be thankful![​IMG]
  6. tieguy

    tieguy Guest

    Your wasting your time with him.
  7. deliver_man

    deliver_man Guest

    Sorry, moreluck, I didn't realize that your were just doing me a favor by reminding me to be thankful[​IMG]. But that didn't seem to be the point of your post at all.
    Maybe with this kind of news, all the folks complaining about the new contract should thank their lucky stars that they even have a job.
    It seemed to me you were trying to link someone at UPS's opinion about the current contract to the situation at CF. There is no link. If CF was NOT declaring bankruptcy, would it then be OK to be unhappy with the contract? Sounds pretty silly. Not that I am unhappy with the contract, mind you, I just don't see what the situation at CF has to do with it. As far as the blessings in my life, of course I am thankful, I need no urging to "smell the roses", I know I have it pretty good[​IMG]. But the message implicit in your post was not to be thankful for the things we have, but rather to be thankful to UPS for all the bad things that don't happen to us. And that someone who isnt happy with the current UPS contract is somehow ungrateful in a general sense, no matter what his specific issues may be. I don't walk around saying "Gee, thank God I don't work for CF" in the same way that I don't walk around saying "gee, I'm glad I don't live in Ethiopia" or "Gee, I'm glad I wasn't born a cripple", etc, etc, you get the picture. Anyway, I'm willing to concede that I took your post the wrong way, and apologize if I offended you with my remark. Take care.
  8. deliver_man

    deliver_man Guest

    Your wasting your time with him.
    Ahh, Mr tieguy [​IMG]
    What thread would be complete without some deep, inciteful, and unfailingly polite comment from you? You are like a breath of fresh air, my friend [​IMG].

    (Message edited by deliver_man on September 03, 2002)
  9. tieguy

    tieguy Guest

    Why deliver man I believe I would then be wasting my time.
  10. upsmule

    upsmule Guest

    <font color="ff0000">Now I know why it seems that all I deliver is irreg's now! I was wondering were all the over 70's where coming from! yea, I REALLY don't think it was a good contract NOW. Teamsters and ups BOTH knew that this was coming......strange don't ya think that this news hits just as it seems apparent that the contract will be RAT-RAT-RAT-ified???????</font>