Lenders Pull Plug on Company

PTS announced today that it was shutting down, effective today, and Teamster carhaul negotiators are setting the record straight about the company's demise.

"In its announcement, PTS suggested that our failure to accept its most recent proposal led to the closure, but nothing could be further from the truth," said Fred Zuckerman, Teamsters Carhaul Director. "We learned this afternoon that PTS permanently closed its doors after its primary lenders, Black Diamond Capital Management, cut off access to its credit facility earlier this week. The union has been on strike against PTS since Monday, June 9, 2008, in support of our bargaining demands and in protest of the company's unfair labor practices. PTS's top officials met with us all day yesterday to try to end the strike and to convince us to accept drastic wage concessions for our members. The company did not provide us with information that was anywhere near adequate to support its demands. The company did not present us with a viable plan to get out from underneath its debt. Instead, the company wanted to force our members to bear the lion's share of the cuts and to shoulder a grossly disproportionate share of the ongoing risks relating to the company's problems with its lendors. We countered with a detailed proposal to the company, which included significant operating improvements for PTS and which in our opinion would have enabled to company to survive. The company rejected our proposal and insisted only on cutting our members' wages. At the same time, though, the company's top management would not take the same cuts for themselves. Their last-second gesture to take just a modest cut in relation to the cuts they wanted our members to take was an empty one at best. Based on the company's actions today and reports of lock downs at the facilities, it appears the company has chosen to shut its doors rather than continue talks with the union."

Background

The union's detailed bargaining proposals to save the company yesterday were apparently unacceptable not just to the company but also to Black Diamond, which has been closely monitoring the company's talks with the union. Black Diamond made little secret of its desire to protect and profit from its investment in PTS with a minimal amount of additional equity and a maximum amount of wage concessions from the union. Black Diamond apparently decided that enough was enough, however, and filed papers in Bankruptcty court earlier this week to liquidate the company. In the opinion of the union, PTS did not present a viable plan that would have allowed PTS to survive. Indeed, as the union discovered in Bankruptcy Court last week, even with additional loans from its primary lenders and significant wage concessions from the union, the company had a very slim chance of surviving even to the end of the month based on their own projections. Likewise, in the opinion of the union's experts this week, the "revised" terms of the bankrupt company's new financing and line of credit still left PTS with enormous debt and little opportunity for needed expenses such as purchasing new equipment. The union is deeply saddened to see such an old established group of carriers terminate operations under the weight of this enormous debt and the very difficult operating environment of the auto industry. PTS was able to climb out of bankruptcy once before but it apparently was impossible to do so this second time around in bankruptcy.

Looking Ahead

"PTS employees should contact their local union for additional information regarding work opportunities and other assistance that may help them," Zuckerman said. "The union will send additional information to the local unions as we learn more about which carriers may be serving the auto manufacturers in your area the future."

"As for the strike, let me make this clear: we went on strike to support our our bargaining demands and rights," Zuckerman said. "Our priority remains to protect our members' rights. The Carhaul Division will work with the local unions to make sure we provide opportunities for our members