Further concerns have arisen about the future of Jack Cooper in the midst of troubled relationships with its carmaker clients.
Drivers for North American vehicle hauler Jack Cooper have been unloading GM vehicles from their trucks this week, as Jack Cooper has stopped all services for the OEM.
In a statement provided to Automotive Logistics, GM said the decision was made by Jack Cooper to unilaterally stop services to GM, effective immediately.
The statement from GM said: “In light of this material breach of their agreement and the ongoing and timely needs of GM’s business, we have no choice but to implement contingency plans with other providers. We do not anticipate any further disruptions to the delivery of our vehicles.”
It added: “We are grateful to all the Jack Cooper Transport [JCT] employees for their work to support GM over the years. Importantly, we are helping identify positions at other businesses for impacted JCT employees, and we believe that a significant portion will be successfully transferred.”
Multiple sources have cited an email sent to Jack Cooper employees which said: ”For the past several weeks Jack Cooper has negotiated in good faith with GM to agree on a continued business relationship. Jack Cooper and GM have been in business together since 1928, and Jack Cooper has proudly won GM’s ‘Supplier of the Year’ award three times in the last 15 years. Nevertheless, on Thursday, February 6th, Jack Cooper learned that GM instructed its teams to stop providing vehicles to Jack Cooper for hauling.”
GM and Jack Cooper have been renegotiating their contract through the vehicle hauler’s management team and private equity lender Cerberus Capital Management. At the time of publishing, Cerberus Capital Management is unavailable for contact, with their website down for “scheduled maintenance”.
GM’s move comes a month after Ford broke its contract with Jack Cooper before its agreed contract expiration date. Ford and GM are two of Jack Cooper’s biggest customers for vehicle delivery services. In a previous article, Automotive Logistics’ in-house automotive analyst Daniel Harrison said: “In terms of Jack Cooper’s immediate prospects, their major FVL clients were Ford, GM and Stellantis, and the loss of a major client like Ford means there is a very real prospect of major job losses, restructuring or potentially even bankruptcy.”
Earlier this week, on February 5, two US senators wrote a letter to Jim Farley, CEO of Ford, asking the OEM to fulfil its commitments of its contract. Senators Josh Hawley and Roger Marshall said the decision to break the contract threatened the livelihoods of the Teamsters union workers and their families.
Jack Cooper has previously faltered under financial pressures. Back in 2019, Jack Cooper reorganised its business under Chapter 11 proceedings following an underfunded Teamster pension that was leading to almost-certain insolvency. The company exited bankruptcy proceedings in the same year, extinguishing around $250m of debt and permanently removing $2 billion of underfunded pension liability.
It is as yet unclear whether Jack Cooper’s Mexico operations will be impacted. The hauler has been expanding its footprint in Mexico in recent years, having opened five locations in Mexico in 2022 and added 12 customers.
Jack Cooper has been contacted for comment.
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