One of the nation’s largest trucking companies called it quits on Labor Day. After 73 years, Vancouver, Wash.-based Consolidated Freightways announced it was discontinuing operations immediately.
The nation’s third-largest less-than-truckload carrier told more than 15,000 employees the immediate closing was “in order to assure the orderly liquidation of the business.” The company planned to file petitions for Chapter 11 bankruptcy on Tuesday.
One of the oldest for-hire carriers in the country, CF was a pioneer of many things, including building their own lightweight tractors (which later became Freightliners) and being the first carrier to offer coast-to-coast service.
However, the company has lost $146.8 million in the last six quarters while its stock has plummeted. John Brincko, brought in as a turnaround CEO in May, reportedly considered asking the Teamsters union for a pay cut. The company also had to scramble to avoid having its stock de-listed by Nasdaq after missing the Aug. 14 deadline for CEOs and CFOs to sign off on the accuracy of earnings statements.
One of the company’s largest stockholders recently told the Portland Oregonian newspaper, in a prophetic comment, “The company has been hemorrhaging cash for so long at such an alarming rate. I don’t care how strong of an underbelly it has, it can’t go on like that.”
In letters mailed to each employee, 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."
Brincko said that despite the severe restrictions imposed on the credit, insurance and real estate markets since the events of last Sept. 11, "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."
It was not to be. Problems with insurance turned off lenders and investors, and the company was not able to get the financing it needed to continue operating.
Operations of the company's CF AirFreight and Canadian Freightways Ltd. subsidiaries were not affected.
The nation’s third-largest less-than-truckload carrier told more than 15,000 employees the immediate closing was “in order to assure the orderly liquidation of the business.” The company planned to file petitions for Chapter 11 bankruptcy on Tuesday.
One of the oldest for-hire carriers in the country, CF was a pioneer of many things, including building their own lightweight tractors (which later became Freightliners) and being the first carrier to offer coast-to-coast service.
However, the company has lost $146.8 million in the last six quarters while its stock has plummeted. John Brincko, brought in as a turnaround CEO in May, reportedly considered asking the Teamsters union for a pay cut. The company also had to scramble to avoid having its stock de-listed by Nasdaq after missing the Aug. 14 deadline for CEOs and CFOs to sign off on the accuracy of earnings statements.
One of the company’s largest stockholders recently told the Portland Oregonian newspaper, in a prophetic comment, “The company has been hemorrhaging cash for so long at such an alarming rate. I don’t care how strong of an underbelly it has, it can’t go on like that.”
In letters mailed to each employee, 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."
Brincko said that despite the severe restrictions imposed on the credit, insurance and real estate markets since the events of last Sept. 11, "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."
It was not to be. Problems with insurance turned off lenders and investors, and the company was not able to get the financing it needed to continue operating.
Operations of the company's CF AirFreight and Canadian Freightways Ltd. subsidiaries were not affected.
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