Checker Motors Corp. transformed itself 21 years ago from cab maker to full-time parts supplier. But it's struggling to turn a profit.
The small, privately owned company in Kalamazoo, Mich., once known for making checker-bordered taxis that were the signature of fleets in New York and Chicago, now supplies metal stampings and modular assemblies to the Big 3.
Checker had sales of about $55 million last year, down "considerably" from 2001, says David Markin, the company's principal owner and president. He declined to be specific, saying only that he expects sales to improve slightly this year. But the business isn't making money, Markin says. "We have too much unused capacity, 25-30 percent," he says of his 630,000-square-foot plant on the west side of Michigan.
Unused capacity is why Checker started making parts in the first place in the mid-1970s, as demand for its cabs decreased.
Chevrolet was Checker's first stamping customer. In 1977, General Motors awarded Checker the contract to build the frame for the F-car platform, which was the basis for the Chevrolet Camaro and Pontiac Firebird. "We developed a large volume for three or four years," Markin says, "but we didn't learn our lesson then that you need to diversify with more than one part, and you need to keep looking for other business.
"Around 1981 I realized we would never make money building cars," he says. "Because we didn't have enough volume to absorb our overhead, we were buying parts from competitors and we were selling cars to our own customers - we owned some taxi cab companies - who could have bought cheaper Chevrolets."
So Checker built its last cab on July 12, 1982. It didn't try to sell that part of the business, which had produced 5,000 cars a year at its peak.
Morris Markin founded the company in 1922 as Checker Cab Manufacturing Co., and in the mid-1950s he changed the name to Checker Motors. David Markin took over when his father died in 1970. GM is Checker's largest customer, representing nearly 90 percent of revenue.
Checker produces body stampings for the Sigma platform, which includes Cadillac's CTS and SRX, and for the Saturn L series.
The supplier's growth plan relies mostly on winning more GM business. But Checker isn't considering diversification. The company already tried - and stopped - making tubing and some plumbing equipment, including sinks and bathtubs. "We're going to stick to the things we know best," Markin says.