For those of you who may not have met me before, I am Davide Marking President of Checker Motors. My father, Morris Markin started this corporation in 1922 and I have been CEO since 1970. My son Christopher, has worked here for the past 10 years, and I am hoping there will be a company here for him to run.
If anyone has questions, please raise your hand anytime.
Even though I am out of touch with some of you, there are many of you here that I have known for a long time, and I have a strong personal love for Checker Motors Corporation.
I am here today because I do not want you to lose your job.
On May 10, 2008 you rejected our request to reopen the contract. Some of you may wonder why it is so important to reopen the contract. It is because we cannot freely discuss the issues involved and our offer our proposed solutions to the current problems without reinstituting the bargaining process that comes with reopening the contract.
I am concerned that the current policy your union is following will ultimately cost you your jobs.
In 1996 when the parent company of Checker Motors, International Controls Corp., was broken up and sold, Checker (The smallest company of the group) remained unsold because of its large underfunded post-retirement fund.
I was able to convince my partners to put $10,000,000 in additional capital into Checker so we could continue to operate and all would keep their jobs.
Recent problems in the auto business, including massive losses by the Big 3, have caused us to lose substantial amounts of money in the last few years eroding our operating capital, to the point where we have gone back to you for concessions, it was to save jobs. I don’t want you to lose your jobs, but it is necessary to discuss our problems with you and for you to listen to our proposed solutions.
The company has already taken dramatic steps to reduce overhead and improve efficiencies. 9 out of 75 salaried employees have been terminated, and pay cuts of up to 25% have been instituted for the remaining salaried employees. Our Chief Operating Officer, Larry Temple, passed away recently and was not replaced. His duties were split up among 3 of our senior managers. The exterior maintenance office was shut down as well as the Human Resources building many manufacturing process have been improved in the press room, as well as Plant 3, with many more improvements to come.
Let me also mention some of the other facts involved:
We are willing to consider a more favorable profit sharing plan which could make up for some of the concessions we are asking for. We have already paid out over $3,000,00 in profit sharing to our union employees from 1996 to 2004. We have also increased pension contributions during the last 15 years from $.461 to $2.409 per hour.
There are other ideas to share with you, including the union’s request for a buy out retirements. Contrary to your unions. Communication, we have never refused to discuss any if their suggestions, but we cannot do so unless you agree to reopen our contract.
What is the company asking for?
The company and its financial experts have determined
that we need $6,000,000 in annual savings, plus the ability to achieve additional savings of $1-2 million dollars for the ongoing demands of our customers.
As of this time, we have completed annual saving of approximately $2,000,000. The balance will need to come from the changes to the contract or other improvements, for every dollar we can generate in saving is one less dollar that will need to come from the labor agreement.
We are at a critical point in our corporate existence. If we are unable to bargain, with your union on our current contract, we will have to seek relief in a bankruptcy filing. How does that affect you? Simply put, the bankruptcy court has the right to approve changes without consent of your union.
On January 16, 2009, the 87-year-old Kalamazoo company filed in US Bankruptcy Court in Grand Rapids, Michigan. Escalating raw material prices and dwindling sales for its customers’ products were cited as the main reasons for the filing, but another reason was labor costs. It was reported that a deal with unionized labor could not be reached after a year of negotiations.
At the time of the bankruptcy, Checker’s customer base included General Motors, Chrysler, Ford, and Navistar. Checker was the eighth-largest American auto supplier to go bankrupt in recent years. GM and Chrysler followed Checker’s bankruptcy just several months later.
In February, Checker asked the U.S. Bankruptcy Court for Western Michigan to reject its contract with 125 union workers and eliminate health care and pension benefits for 176 union retirees. On February 27, 2009, the judge in Checker Motors Corp.’s bankruptcy case threw out the company’s request to eliminate its labor agreement. Bankruptcy Judge James D. Gregg agreed with United Steelworkers Union Local 2-682 attorneys that the company had not treated all parties involved in the proceeding fairly when it awarded four top executives a total of $275,000 in retention bonuses prior to filing for bankruptcy.
In March 2009, a committee of unsecured creditors in the bankruptcy case asked Judge Gregg to consider whether negotiations among the union, United Steel Workers Local 2-682 and Checker Motors could resume and reach concessions or if a mediator should be brought in, according to court documents.
On April 4, 2009, Checker notified its more than 270 employees that CMC would close its business by the end of June.
In a bankruptcy court hearing Monday, April 6, 2009, CMC and labor union representatives said they intended to continue trying to negotiate a new union contract that would allow Checker Motors to survive.
Unfortunately, the Union and CMC could not come to a new agreement and Checker was effectively liquidated by January 2010.