Out of necessity, Chrysler creates auto-haul division
WINDSOR, Ont. — Chrysler Group LLC, partly out of necessity, has created its own auto-hauler subdivision, now up and fully running into its first year.
The forming of the division is an interesting story.
Back in March 2011 one of Chrysler’s principal auto haulers, Allied Systems, get embroiled in a rate war with Chrysler, forcing a temporary stand-off where no vehicles were being shipped, after the long-time hauler demanded increased compensation.
Chrysler was having none of it and quickly severed ties. Allied’s 27-acre yard along Provincial Rd. in south Windsor soon became abandoned. Only recently was it purchased through a vesting order of the Ontario Court of Justice, at $3.7 million, by Connecticut-based Black Diamond Capital Management.
The investment firm didn’t return requests for comment but it is known to specialize in buying distressed properties often below market prices and restructuring for sale.
But in the immediate aftermath of ending its arrangement with Allied, Chrysler scrambled to find replacement haulers. The union representing Allied workers also had an idea: how about Chrysler creating its own auto-hauler subdivision?
Unifor Local 444 president Dino Chiodo, who also represents hourly workers at Chrysler’s vast minivan assembly plant, said the union “sat down with Chrysler right away” and thought there were “opportunities that we can capitalize on.”
Not the least of these was to employ some of the former Allied drivers. Chiodo said the union made a “business case” to the corporation to create its own auto-hauling division.
“That’s just an example of the union working with the company to try to solidify a good economic solution to maintain viability for the corporation,” he said.
The result was Chrysler Group Auto Transport, where Chrysler invested $15 million and purchased 33 tractor-trailers.
Chiodo said it took “almost a year to hammer” out the deal and another to get all the trucks in place. He said this was an entirely new business model for Chrysler and obviously was a learning curve.
“We had to re-engineer the trucks, what (they) looked like, how they could haul vehicles – (meet) all the rules and regulations,” he said. “Because Chrysler was never involved with it, they always hired other companies to do that work, so now they have to get into a different logistics profile.”
The company purchased 33 Volvo Class 8 tractors and as many Cottrell-manufactured NextGen CX-09LS Quickloader open auto-haul trailers designed for short-haul and multiple daily loads.
“Simply put, we were interested in creating something that was flexible and of course at the time there were capacity issues,” Marty DiFiore, Detroit-based head of Chrysler Group Transport and Chrysler Group Auto Transport said. “So from those two perspectives it was something that we were intrigued with and wanted to do.”
The operation is based in Windsor with trucks operating in and out of AWC Auto Warehousing with facilities off of E.C. Row Expressway.
That’s different from where Chrysler’s traditional trucking arm, Chrysler Group Transport, has operated – at the minivan plant yard. Maintenance for the auto-haul division is contracted out.
Chrysler’s general transportation division carries parts and has 90 tractors and 284 trailers based in Windsor.
“We are running an operation centric to Windsor but they are doing cross-border moves,” DiFiore said.
DiFiore said the auto transport division hauls yard-to-yard or railhead-to-railhead.
The trailers can carry as many as eight units. The cargo includes Windsor-built Chrysler and Dodge minivans and Chrysler’s Brampton-manufactured Dodge Chargers and Challengers. Inbound to Canada they’re picking up Dodge Rams, Jeep Cherokees and Jeep Grand Cherokees.
“This is all network-type deliveries,” DiFiore said. “At this point we are not doing dealer deliveries where you have a truck full of eight units and you’re basically doing a milk run and you’re dropping units off at various dealerships.”
As for the tractors, they feature the Volvo I-Shift 12-speed automated mechanical transmission technology with gearshift operated by intelligent electronics.
DiFiore said the tractors have “gotten very favourable feedback from the drivers who typically use a 10-speed manual and they have all that type of shifting you have to do.”
Three dozen former Allied drivers were hired for the auto division and Chiodo said other drivers were absorbed elsewhere within Chrysler operations, hired by Cassens Transport – which continues to haul for Chrysler – or were given severance packages. Chrysler product is also moved by rail.
DiFiore said the first tractor-trailers arrived in July 2012, and there was a full fleet complement by the end of last year.
“This is our first full maturity of the operation through this year since the beginning of this year,” he said. “And we’ve basically delivered from various points about 100,000 units to date.”
Chiodo was dismayed that the former Allied yard had been sold.
“We wanted Chrysler to buy it so we could use it as an official yard but apparently that’s not the case,” he said.
Chrysler Canada spokeswoman LouAnn Gosselin said the sale and Chrysler’s interest in the yard is “not something we would comment on.”
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