No. 2 vehicle hauler will go out of business

No. 2 car hauler Performance Transportation Services says it will go out of business. Photo credit: JOHN SOBCZAK
DETROIT -- The nation’s second-largest vehicle hauler says it will stop all operations and go out of business.

Decreasing volume and rising fuel prices had driven Performance Transportation Services Inc. into bankruptcy twice in the past 2½ years. Last week, a Teamsters union strike against the company dealt the final blow.

The move will likely have little effect on deliveries of vehicles to auto dealerships. Automakers put in place contingency plans when Performance Transportation’s 1,250 drivers went on strike last Monday, June 9. No major delivery interruptions were reported. The vehicle-hauling industry has developed excess capacity as North American vehicle production has declined.

The Teamsters said last week that the “vast majority” of its members had found work at other unionized vehicle haulers.

In a letter sent to employees late Friday, June 13, Performance Transportation CEO Jeff Cornish blamed the Teamsters for refusing to accept a temporary 15 percent wage cut that he said was necessary to keep the company afloat.

“Management and many of our Teamster members were willing to make the required sacrifices to save the company,” Cornish said in the letter. “But the leadership of the union had a different agenda.”

The Teamsters disputed Cornish’s remarks, noting that Performance Transportation lenders had asked a federal bankruptcy judge to liquidate the company.

“The company did not present us with a viable plan to get out from underneath its debt,” Fred Zuckerman, director of the Teamsters’ vehicle-hauling division, said in a statement. “Instead, the company wanted to force our members to bear the lion’s share of the cuts and to shoulder a grossly disproportionate share of the ongoing risks relating to the company’s problems with its lenders.”

Cornish said Performance Transportation, of suburban Detroit, had hauled about 2.7 million vehicles each year for most of the major automakers operating in the United States.

There was no immediate word today on which vehicle haulers would take over Performance Transportation contracts. Such decisions will likely be worked out in U.S. Bankruptcy Court in Buffalo, N.Y., which is presiding over the case.

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