Looking at Labor Day

Looking at Labor Day . . .


This past Monday in parks, patios, and backyards across America many people who do their forty during a common work week spent valuable time amongst friends, family, and co-workers. Americans appreciate this low-key holiday. Monday’s gone and paid for. Traditional schools start back up the next day. It’s still hot, but the season is closing, and football is ready to get into full gear. In the back of everyone’s mind is a different kind of anniversary that we’ll have to accept in just over a week.
The President was finished with vacation and used the day to lobby and campaign in front of specialized labor groups. The networks absorbed it and on televisions everywhere the lead story was labor, the need for flexible unions, homeland security, and Iraq. Somehow these pieces all fit together into a string of ideas that fit neatly upon evening broadcasts. To many people the words were confusing. Other than bad weather in a few states, the day was ordinary.
Later during the afternoon, as the nation really began to relax a snippet appeared in several newscasts. It was a strange event. A 73 year old unionized LTL Trucking firm named Consolidated Freightways went belly up. CF was listed as the nation’s third largest LTL carrier, now behind Yellow and Roadway. All gates were locked at all CF terminals across the country that morning. Security had moved in. The company filed Chapter 11 and it was shutting down its operations. The company had run out of cash.
The contractual labor force soon contacted one another and by noon most were aware of what had happened and began to gather either in front of terminals or at houses in order to get a grasp on the situation and to begin discussing their future. Some vented their frustrations, and many were angry. Large numbers of CF’s drivers and dockworkers live on a shoestring or check to check. With families to feed, mortgages to pay, and bills to meet, fear set in a whirlwind of uncertainty. The word was a 1-800 number existed which the workers could call for further information which had a pre-recorded message by the new CEO, an outside turnaround specialist who took the helm for a few months. He brought in his people to steer the sinking carrier right. He was a financial big shot who came with all the credentials and was requested to carry out the final phase of CF’s restructuring process. 15,500 dockworkers and drivers looked his way for some business leadership. Maybe they finally found their guy. It looked like he was cleaning up some of the dead weight upstairs. He brought in KPMG and fired Arthur Anderson. He had a 64-point plan in place. Everything was ready to go. The stock was tumbling down quickly but the company still might finally find some direction. And then it ended.
The domestic operations were finished; the whole system would be emptied out of freight this week. Consolidated Freightways had a large mix of experienced labor many of which came from other carriers that went down before CF’s time. They’d been through it before. For them it’s just time to pick up and go again.
Consolidated Freightways turned sour in a very short time frame. It had become a poor investor. In just a few decades it had built a corporation known as CNF, out of which began the Con-Ways, non-union regional carriers which in time became one of the main competitors of Consolidated Freightways. They fell under the same umbrella company, which eventually was somehow considered the parent company of Consolidated Freightways. It didn’t make any business sense. Consolidated Freightways also purchased Emery Air for hundreds of millions of dollars in order to get a hand in the airfreight industry. It was another huge loser for Consolidated Freightways. It’s resources began to dwindle, and then was promptly spun-off from the parent company(CNF) which it (CF) created in order to go its own separate way. Though independent of CNF apparently on its own and with little debt, the cash cow had been drained. Even at premium economic levels the system began to clamor in its workings from a host of problems such as inexperienced management, an old fleet in poor repair, an inability to hire and promote based on freight performance, eroding freight operations, building new terminals on the border with what little expenditures remained, lack of training, rampant rumors, and poor morale. The executives had lost sight at what it takes to keep a domestic freight/trucking system fully operational in health and safety. CF still had some accounts and comparable tonnages to the other LTL Giants, but there was no way to protect the system, let alone rebuild it down the road. CF had been completely bilked, then neglected. The moment Consolidated Freightways lost its long-term vision and business obligations to reinvest in itself, the carrier was doomed. Consolidated Freightways (a unionized carrier) had lost its focus on what it was initially designed to do as a business, whereas CNF became a keen corporate mover.
As of Labor Day it was over. The domestic carrier Consolidated Freightways ceased to exist, but its Mexican and Canadian divisions would continue since they were profitable. Consolidated Freightways was like other stories this day and did get an honorable mention on the major networks’ evening news. A system that rose out of the ashes of the depression by the business pioneer Leland James, and arguably the finest trucking company America has ever produced is now gone.
A court will decide sometime soon whether CF contractuals should get paid for the hours they worked over the last few weeks. A few workers filed for unemployment during the holiday since you can do so now on-line. The rest will file sometime this week. Some dockworkers and drivers still have personal possessions at terminals around the country and are waiting for word when they can collect their gear and take it home.
The full liquidation of Consolidated Freightways is nearly complete. It was absolutely brilliant. And on this Labor Day The International Brotherhood of Teamsters got caught sleeping on this one. Corporate America just walked over the grave of 15,500 unionized jobs, and the American media barely gave it a nod.