George Transfer Inc., the Baltimore County trucking company shut down two weeks ago after being cited for hundreds of safety violations, has agreed to sell its business to an Alabama-based trucking company, a George Transfer official said yesterday.
William J. Gallagher, executive vice president of George Transfer, said the tentative agreement to sell the company's customer contacts to Malone Freight Lines Inc. was spurred by the Jan. 17 shutdown ordered by federal authorities.
"All of the income that George Transfer gets comes from moving freight. With none of that happening, we had no income," Mr. Gallagher said. "It wouldn't take long for George Transfer to run out of money."
He also said the sale agreement was inspired by a desire to get the company's drivers back to work.
Mr. Gallagher said about three-quarters of the more than 400 independent owner-operators who drove for George Transfer have already signed on with Malone Freight Lines.
The sale, which is expected to close within the next several days, will mean the loss of about 40 jobs at George Transfer's headquarters in Parkton, he said. Mr. Gallagher added that most of those employees had been laid off after the shutdown.
He said most of George Transfer's customers, including Bethlehem Steel Corp. and Alcoa, will likely agree to transfer business to Malone Freight Lines.
George Transfer would also sell 74 tractors and about 150 trailers. He said Malone Freight Lines would assume operations at most of the company's terminals, including one in Dundalk.
George Transfer, which primarily hauled steel and aluminum from 40 terminals across the country, became the largest trucker ever shut down for safety violations after federal highway officials declared its operations "imminently hazardous."
It was cited for more than 400 violations of federal highway safety regulations, including charges that it required its drivers to falsify logs designed to keep exhausted truckers off the road.
The order for the company to cease interstate operations -- which, authorities said, amounted to nearly all of its business -- came after an investigation showed the company broke a 1994 agreement to devise and carry out a plan to improve its safety practices, highway officials said. The company has been fined more than $430,000, the officials said.
The two companies began talking of a merger last summer, Mr. Gallagher said, and had scheduled a meeting for Jan. 18 -- the first full day of the shutdown.
The tentative sales agreement was reached within days.
Yesterday, Mr. Gallagher took issue with the allegations facing George Transfer, but stopped short of blaming federal Department of Transportation officials for his company's problems.
"We just feel very strongly that what the DOT did was not warranted," he said. "I am not blaming anyone or any entity for George Transfer's demise. I am not blaming the DOT for it. It just created an urgency to do something else."
Mr. Gallagher would not divulge the purchase price in the agreement. He said he and his brother, company President Edward A. Gallagher IV, will be employed by Malone Freight Lines.
Malone Freight Lines, with headquarters in Birmingham, Ala., specializes in hauling metal. The company is a subsidiary of CRST International Inc., an Iowa-based company with 3,000 employees.