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Transcon Lines Lays Off Most of Its 3,000 Truckers

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TIMES STAFF WRITER

Most of Transcon Lines’ 3,000 truck drivers and freight handlers have been abruptly laid off by the money-losing Los Angeles-based long-haul carrier, it was learned Monday.

No announcement of the layoffs was made by Transcon or by Growth Finance Corp. of Miami, the private investment firm that last month acquired Transcon’s trucking business.

Transcon had run into deepening losses as a result of rate wars unleashed by deregulation.

The action followed closely the approval on April 20 by the Interstate Commerce Commission of a request by the new owner and its affiliate, Olympia Holding, to fold Transcon’s trucking business into PIE Nationwide, another struggling trucker that Growth Finance acquired last month.

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David Clavier, a PIE spokesman in Jacksonville, Fla., said he could not say precisely how many employees were laid off or how many had worked in Southern California. The workers who were laid off are represented by Local 63 of the International Brotherhood of Teamsters. Union officials could not be reached for comment Monday.

Clavier said most Transcon sales personnel are now working for PIE, and he held out hope that some drivers and other freight personnel could be hired later, depending on PIE’s success in retaining Transcon customers.

Harold D. Doyle, PIE’s president and chief executive, said in a statement released after the ICC ruling that the “integration” of Transcon’s business into PIE “went very well.” But Doyle added that “this was not a merger of two trucking companies but the absorption of one company’s business into another.”

Transcon Lines operated 247 freight terminals in 45 states, and its employees had acquired what at one point was a 49% stake in the company as a result of wage concessions aimed at keeping the company alive. But Transcon sank deep into red ink: It lost $19.9 million in 1987, $23.7 million in 1988 and $31.6 million last year on revenue of $226.5 million.

PIE, which was privately owned before its acquisition by Growth Financial, is about twice the size of Transcon Lines. It had said its 1989 revenue was about $500 million but did not release its profit or loss figures.

Transcon and PIE specialize in consolidating small shipments in single trailers. This so-called less-than-truckload hauling is a $14-billion segment of the national trucking business. Whether PIE can retain enough of Transcon’s business to expand and regain profitability “remains to be seen,” said George Morris, who follows the industry for Prescott, Ball & Turben, a Cleveland brokerage.

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“It’s a very narrow market and there are fewer and fewer in it,” he said, “and you’re up against the really big companies.”

Morris said Transcon’s demise came as no surprise and that PIE’s success is far from assured. “PIE was on thin ice as well,” he said, “so I’m not sure how this is going to work out.”

Transcon, he said, has been in “financial free fall” because of the severe rate cutting that has marked the past decade since the 1980 deregulation of the industry.

The company last year had sought to buy the trucking operations of a loss-plagued rival, Coastal Corp. That acquisition would have made it the nation’s fourth-largest trucker in its field after Roadway--with annual revenue of about $2.2 billion--Yellow Freight and Consolidated Freightways. But the deal, which would have increased Transcon’s revenues to nearly $700 million, fell through.

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