Car Hauler Jack Cooper to Lose $70 Million in Revenue as Nissan Terminates Relationship
Nissan will terminate its agreement to with carhauler Jack Cooper Holdings Corp. effective in July, according to an April 4 notice.
Jack Cooper is a union shop whose members move and maintain trucks that carry new vehicles from automakers’ plants to dealers. The carhauler ranks No. 42 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
As a result of losing Nissan’s business, a new contract with the International Brotherhood of Teamsters, plant shutdowns or closures and layoffs, Jack Cooper told the Securities and Exchange Commission that revenue will decline up to $70 million before the end of this year. As a private company, Jack Cooper isn’t required to disclose detail financial statements to the public.
But Jack Cooper also warned the SEC that there is also significant worry about its debt among other large customers.
“[They] have expressed concern regarding the Company’s financial condition and significant leverage and have indicated that they are closely monitoring the Company’s financial condition. Accordingly, the failure to reduce the Company’s consolidated indebtedness may result in the loss of additional business, and there can be no assurance that the Company will be able to successfully reduce its indebtedness,” the carhaul wrote in a notice.
The sour outlook follows a newly ratified contract after more than two years of protracted negotiations with the Teamsters. Union members rejected two previous contracts before recently accepting a third deal.
The national agreement provides for health, welfare and pension contributions to maintain benefits. It also provides for wage increases of between 30 cents and 45 cents per mile in each of the next five years. In addition, all current “new business” rates will be increased by 6% and then by 3% each year going forward.
Other carhaulers include union-run Cassens Transport, No. 72, Active Truck Transport of Pleasant Prairie, Wis. and RCS Transportation of Simpsonville, Ky., which provides support services related to the intermodal transportation of cars.
