Yucaipa plans to buy car hauler
Los Angeles billionaire Ron Burkle’s investment firm, Yucaipa Cos., is buying the nation’s largest fleet of new-car haulers.
On Friday, a U.S. Bankruptcy Court filing in Georgia disclosed plans for Yucaipa to take over Allied Holdings Inc.
If the deal is completed, Yucaipa will control more than 60% of the market for transporting new cars from plants, ports and other sites to auto dealerships. It acquired ailing Performance Transportation Services Inc. in December.
The Allied deal, which calls for a 15% wage cut for 3,300 of the company’s drivers, would allow the Decatur, Ga.-based firm to exit bankruptcy.
The Teamsters union will ask its members to ratify the plan, saying it has no other choice.
“Nobody likes to take concessions,” said Fred Zuckerman, director of the Teamsters’ car-hauling division. “But in this particular case, there is no alternative.”
High fuel costs and slowing car sales forced Allied to file for bankruptcy protection on July 31, 2005. Yucaipa, which already owns much of Allied’s unsecured debt, negotiated the wage concessions in early February.
Union drivers have 45 days to ratify the agreement. Although Zuckerman said the pact would preserve the jobs, healthcare and pensions of 5,000 Teamsters, including drivers in Canada, not everyone is pleased.
“It’s like working six out of the next 36 months for free,” said John Thyer, secretary-treasurer of Teamsters Local 604, which is based in St. Louis. Thyer is leading a dissident group that pledged to oppose the cuts.
He said the new contract would force drivers working for other companies to accept wage concessions in future contracts.
Bloomberg News was used in compiling this report.