DETROIT - Performance Transportation Services Inc. and the Teamsters are quarreling over an incentive plan for the three top managers at the troubled car hauler.
The plan rewards top executives if the company exceeds earnings forecasts and pays creditors by Sept. 30 - the date PTS hopes to emerge from Chapter 11 reorganization.
PTS is North America's second-largest vehicle hauler, controlling about 23 percent of the market. Labor unrest could have ramifications throughout the industry, disrupting the supply of new vehicles to dealerships. Ford Motor Co. provides 43 percent of its business and General Motors accounts for about 27 percent.
PTS' plan, which it calls a performance incentive program, has two parts. Under the first, executives can receive a bonus of up to a year's salary if the hauler significantly exceeds earnings forecasts. But if the company falls short of its financial benchmarks, the executives don't get a bonus. The second part creates a bonus pool of $1.9 million to be divided up among the executives if PTS pays creditors $105 million by Sept. 30. The pool decreases with each month it takes the company to pay debts.
Both parts of the plan cover CEO Jeffrey Cornish, COO John Richter and CFO Jack Stalker.
Although somewhat common in Chapter 11 proceedings, such incentive plans can anger employees, unions and creditors.
The Teamsters, which represent most of PTS' 2,100 workers, said in court documents: "At the level of CEO, COO and CFO, 'the job' certainly includes achieving profits. Retention payments under the old business judgment standard always assumed that the executives were actually working for their money, not that they were simply being paid for breathing."
Fred Zuckerman, director of the Teamsters' auto transport unit, told Automotive News: "We're certainly not going to agree to enrich some folks at the cost of the people (who are) out there making the money."
PTS says in court documents that the plan is needed to compensate the three executives because their stock options have lost value as a result of the company's Chapter 11 filing.
Spokeswoman Meaghan Repko says the plan offers incentives to company executives if they can get the company to perform above normal levels.
The car hauler asked a bankruptcy court Feb. 3 for approval of the incentive plan. A hearing is set for March 6. PTS filed for Chapter 11 reorganization Jan. 24, joining North America's largest car hauler, Allied Holdings Inc., which filed July 31.