St. Johnsbury's demise idles 140 Md. workers Trucking line had Hyattsville, Jessup terminals

June 16, 1993|By Suzanne Wooton | Suzanne Wooton,Staff Writer

More than 140 Marylanders lost their jobs yesterday as one of the nation's largest trucking companies shut down after losing a three-year battle with a sagging economy and nonunion competitors.

Workers at St. Johnsbury Trucking Co. terminals in Jessup and Hyattsville were among the company's 4,100 employees throughout the Northeast who were laid off following weeks of speculation that the company would close or be taken over, much like the Eastern Shore's Preston Trucking Corp. last year.

"There allegedly were other companies looking at us prior to our going out," said David Crean, St. Johnsbury's regional manager, who supervised 800 workers at 13 terminals in four states, including Maryland.

"The big cause was competitive pressures in pricing from nonunion companies," he said. "We just ran out of cash."

In a last-ditch effort to save the 72-year-old Massachusetts-based company, St. Johnsbury officials sought major concessions from its unionized drivers last week, said John Clemens, president of Local 557 of the Teamsters union, which represents 1,800 drivers and dockworkers in Maryland.

He said the company, which had been told by its bankers to liquidate, wanted to eliminate half of its 54 terminals, lay off workers and replace union health and welfare benefits with a company plan.

The proposal was overwhelmingly rejected by union members, who weeks earlier had accepted a 9 percent pay cut, Mr.Clemens said. Local 557 moved successfully last week to collect back payments from St. Johnsbury for the local's health and welfare fund, he said, which will keep the workers' benefits intact until Aug. 1.

The company's demise was triggered largely by the same fierce competition and stagnant economy that have torpedoed dozens of the largest trucking companies over the past decade. Since deregulation in 1980, thousands of small companies have sprung up, forcing truckers to fight for every scrap of revenue.

Of the top 50 trucking companies operating in 1978, all but nine had closed or merged by last year.

St. Johnsbury, one of the nation's 15 largest trucking companies, watched its revenues dwindle to $287 million last year from $320 million in 1989, Mr. Crean said.

St. Johnsbury specialized in short-haul service in the Northeast, serving such businesses as McCormick & Co. Inc., Random House and Londontown Corp. Even before it shut down yesterday, competitors, including Preston Trucking, were scrambling for its customers.

"Customers will turn to carriers that are financially stable, and that puts Preston in a good competitive position," said Linda George, a spokeswoman for Yellow Corp. of Overland Park, Kan., which acquired the financially struggling Preston late last year.

"If we have more business, we have more activity and we could be in the business of recalling some people," Ms. George said. She said Yellow already has hired some sales personnel from St. Johnsbury. About 150 Preston employees have been laid off this year by Yellow.

APA Trucking Co., another unionized competitor, has hired six drivers, Mr. Clemens said.

The two St. Johnsbury terminals in Maryland have been in the state for about 15 years. Most of their workers had been with the company the entire time and were earning about $17 an hour.

Mr. Clemens said his local was helping workers process applications for vacation and sick pay, and arranging interviews with other trucking companies. He predicted that half would get jobs elsewhere, that about 25 would retire and that the others might remain unemployed.

"It's hard to find jobs right now," he said. "This is the worst it's ever been in the transportation business and there's no light at the end of the tunnel. This industry is really suffering."

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