By: Scott B. Riddle, Esq.

In a filing today, Allied Holdings filed a Motion to Reject the Collective Bargaining Agreement with the Teamsters. 

According to the Motion, the latest negotiations, including proposed agreements exchanged in the last week, were not fruitful.  Allied is seeking to reduce its unionized labor costs about $65 million a year  and without them, the motion states, liquidation is a possibility.  In fact, the motion states that if the current CBA is not modified, "there is no doubt the Debtors would be forced to liquidate."  The Teamsters response (in pleadings and otherwise) will be interesting.

General information about Allied and affiliates, from the Allied website —

Allied is likely the largest transporter of new automobiles, sport-utility vehicles (“SUVs”) and light trucks in North America. Its business operations fall into two main categories. The largest category of business operations is providing “short-haul” delivery services for new and used vehicles over distances averaging less than three hundred miles. A smaller category of business operations is providing various support services with respect to vehicle transportation and distribution. Allied’s revenues in the year 2004 were approximately $895 million. Approximately 97% of these revenues were attributable to Allied’s delivery services. General Motors, Ford DaimlerChrysler, Toyota and Honda account for approximately 88% of the revenues generated by delivery services.

As of the Petition Date, the Debtor had approximately 6,400 employees. Most of these employees are based at Allied’s 133 terminals located throughout the United States, Canada and Mexico. Over 3,900 of these employees are unionized drivers represented by collective bargaining units affiliated with the International Brotherhood of Teamsters (the “Teamsters”). Allied also contracts with independent Teamster owner-operators. As of March 31, 2005, Allied owned 3,438 tractors and 4,275 trailers specially designed for transporting vehicles (each tractor-trailer unit a “Rig”). Allied also leases approximately 451 Rigs and uses 691 Rigs owned by its owner-operators. In total, Allied has 4,580 Rigs under management in its North American operations.