According to the Detroit Free Press, General Motors has ordered transportation firm Jack Cooper to cease transporting its vehicles from assembly plants to dealers across the country. GM made this call out of “an abundance of caution” while Jack Cooper renegotiated its contract with GM.
Jack Cooper operates as a transportation supplier for several large automakers, including GM, Toyota, and Honda, and it’s been awarded the General Motors Supplier of the Year Award. However, Ford canceled its contract with Jack Cooper last month, so the transportation company has been renegotiating contracts with all of its customers, trying to get more money to compensate for the loss of its business with Ford. Jack Cooper had worked with Ford for 40 years, and the Blue Oval was its second-biggest client behind GM.
“Jack Cooper Transport has been a preferred supplier to GM for decades. We are negotiating in good faith with their management team and private equity lender, Cerberus Capital Management,” GM spokesman Kevin Kelly told the Detroit Free Press. “We hope to reach a fair resolution that permits GM to run our business responsibly and serve our customers while allowing (Jack Cooper) to continue operating as an ongoing business and employer.”
However, there seems to be some confusion on Jack Cooper’s end. “Jack Cooper has not received any notice from GM that” any contract had been canceled, Holdsworth said Thursday. “We are relying on their previous statement that they are honoring their contract with Jack Cooper.”
GM is so insistent on Jack Cooper not moving any of its cars that it ordered a Jack Cooper truckload of Corvette models to be unloaded on Thursday at the Bowling Green, Kentucky plant where they’re built. “I stood there and saw them unload 50 cars from the trucks,” an anonymous plant employee told the Free Press. “They have never done that before.”
Because Ford’s contract was terminated, Jack Cooper laid off 400 employees at its Kansas City, Missouri facility and permanently shut down its Wayne, Michigan operations. This was a big enough blow to Kansas City that Senators Roger Marshall of Kansas and Josh Hawly of Missouri wrote a letter to Ford CEO Jim Farley asking for an “explanation for suddenly terminating such a longstanding partnership.”
UPDATE: On January 8th, GM spokesperson Kevin Kelly reached out to GM Authority to provide an updated statement:
“We can confirm that Jack Cooper Transport management has informed us of their plans to unilaterally stop services to GM, effective immediately. 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.
We are grateful to all the Jack Cooper Transport 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.“
Comments
Destination charges are outrageous. I hope this portends well for those fees going forward.
What is a joke is that the fees are the same to the customer no matter the distance from the assembly plant to the dealer. Rip Off!
The money on the window sticker doesn’t all go to the delivery company GM uses part of the money for advertisement
You are correct that not all of that fee goes to the delivery company. GM has been tacking on a margin to that fee since I was working there and probably before that. As for whether they use it for advertising I can’t say. I just knew what the actual delivery cost vs what GM put on the Monroney was marked up with a margin for the company.
I’ve mentioned that fact to many people and for some reason people don’t want to believe it. Believe it! It’s just another profit line item for the OEM’s (not just gm) that nobody questions.
Private equity? Nothing good happens when private equity companies get involved and “invest” in a company. Sounds like Cerberus has invested in JC? Maybe they ruffled some feathers over at Ford over changing contract terms?
exactly !! PE’s drain cash from companies bone dry, then sell off the remaining pieces. Nothing good comes out of companies tied to PE”s.
Ford is not a government employee; Farley doesn’t owe the senators an explanation.
JCT bought another trucking company and the had the audacity to ask GM for 50 million dollars GM offered to give Cooper 25 million so when Cooper asked Fords for the other 25 million it was a hard NO so now you know what we the
employees know 🙄 I’m retired from JCT 5.5yrs now this is what I have found out