Allied Bankruptcy: What Does it Mean for Carhaulers?

June 28, 2012: What does the Allied Automotive Group bankruptcy mean for carhaulers?  That important question remains unanswered at this point.

Teamster carhaulers, as well as the Ford Motor Company, need Allied to survive, because the remaining union carriers simply do not have the capacity to pick up Allied's work.  Since Ford has made Allied their preferred carrier, they likely will survive.

Will Allied pick up more Ford work? That's their goal, but reportedly Ford is reluctant to award them more traffic while the bankruptcy is pending.

Allied Automotive Group filed for chapter 11 bankruptcy on Sunday, June 10, in Delaware. CEO Mark Gendregske, in a conference call the following day, claimed that there will be "no reduction in workforce, pay, or benefits" and that the bankruptcy will be a short process compared to Allied's 2005 bankruptcy.

Gendregske contrasted the bankruptcy to 2005, when Allied demanded Teamster concessions. Typically in a bankruptcy creditors are asked to accept equity in the company in exchange for forgiving loans.

The bankruptcy involves 18(!) subsidiaries, including Axis, but not Allied's Mexican and Bermudan subsidiaries. Allied has retained three top-dollar law firms to represent them in court.

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