Sep 9, 2002
Another scheme to make the workers pay
On Labor Day, Consolidated Freightways, a national trucking company, said it was declaring bankruptcy. Consolidated operated about 300 terminals throughout the country and was the third largest less-than-truckload carrier, meaning it carried partial shipments from many companies, loaded them together and trucked them throughout North America.
Unlike many other companies that have filed for bankruptcy under Chapter 11 of the bankruptcy laws, Consolidated is apparently really going out of business. It immediately began to lay off over 12,000 of its 15,500 employees and said it would lay off the rest shortly. Two of its subsidiary companies – both in Canada – will continue to operate.
Consolidated's declaration of bankruptcy was triggered by a collapse in the price of its stock after it requested an extension for filing its quarterly financial report. It said it needed time to revise its revenue figures because it couldn't attest to the accuracy of its figures.
No wonder! For the past six years, Consolidated has been the center of some real wheeling and dealing. Consolidated was spun off by its parent company in 1996, which not only got rid of the Consolidated name, but also the union contract for its long-haul drivers, along with their pension fund's liabilities. The parent company, which renamed itself CNF, Inc. kept over 60% of the business, including its most profitable parts.
In the six years since, CNF has taken more and more of the business, while the debt attached to Consolidated saddled it with high interest payments.
Whatever the details of all this financial manipulation, the bankruptcy shows that avaricious capitalism is alive and kicking, even while workers find themselves without a job, out in the street.