A federal bankruptcy judge is expected to rule Monday, May 1, whether Allied Holdings Inc., North America's largest car hauler, can cut its U.S. workers' wages by 10 percent. The Teamsters union says such a move could trigger a strike.
Allied controls about 47 percent of the North American car hauling market. In an emergency motion April 13, it petitioned the bankruptcy court to approve the wage cuts. Allied says it needs the cuts, which would save the company about $2 million a month, to avoid liquidation.
Bankruptcy Judge C. Ray Mullins will rule Monday afternoon in Atlanta, said Fred Zuckerman, director of the Teamsters carhaul division. The judge conducted hearings on Allied's motion Wednesday, April 26, and Thursday, April 27.
Allied CFO Thomas King did not return a telephone call Friday afternoon.
The Teamsters represent about 3,500 Allied workers. Union leaders say modifying the contract with Allied would allow President James Hoffa to call a strike.
"It's a possibility," Zuckerman told Automotive News.
Automakers rely on car haulers to deliver finished vehicles to dealerships. Allied's headquarters are in Decatur, Ga.
An interruption in Allied shipments would particularly affect domestic automakers. General Motors, Ford Motor Co. and the Chrysler group accounted for 73 percent of Allied's delivery business in 2004. Figures were not available for 2005.
You may e-mail Greg Migliore at [email protected]