P.A.M. Transportation lays off 75 employees, mostly nondrivers
Story by: At FreightWaves
P.A.M. Transportation Services (NASDAQ: PTSI) confirmed it has temporarily laid off approximately 75 employees, mostly “non-essential to daily operations” in response to recent coronavirus-related auto plant closures.
Responding to an email from FreightWaves, P.A.M. Transportation CEO Dan Cushman said 65 employees were laid off on Friday, “very few” of whom were drivers. Cushman said he doesn’t anticipate a “wave 2” of layoffs but that “about 10 employees” were released from duty Tuesday.
Cushman said the reduction in staff was directly related to “auto plants shutting down.”
The dry van truckload (TL) carrier, which gets much of its revenue from the country’s largest original equipment manufacturers (OEMs), is used to adjusting operations and staffing levels as OEM production schedules change.
In its third-quarter 2019 earnings report released in October, the Tontitown, Arkansas-based carrier announced that it had successfully redeployed “approximately 400 drivers affected” by the United Auto Workers labor strike against General Motors (NYSE: GM), which began on Sept. 16. During the GM strike, the company leaned on its sales team to find replacement freight to keep those drivers seated in trucks.
The six-week strike resulted in losing only 12 of those 400 drivers. In that time period, the company actually increased its overall driver count by six. During the fourth quarter of 2019, P.A.M. Transportation had an average driver count of 2,112 including owner-operators, an 83-driver increase year-over-year.
In 2019, P.A.M. Transportation’s five largest customers accounted for approximately 40% of total revenue — General Motors represented 19%, Fiat Chrysler Automobiles (NYSE: FCAU) accounted for 9% and Ford Motor Co. (NYSE: F) contributed 7%. The other two customers are not listed by name in the company’s filings with the U.S. Securities and Exchange Commission.
40% of the company’s 2019 total revenue derived from transportation services to the automobile industry.
Through a myriad of obstacles in 2019 that included border-crossing delays, the GM strike and a lawsuit, the carrier remained profitable, posting full-year net income of $7.9 million. Excluding the impact of a lawsuit settlement over minimum wage law violations, the carrier ended the year with adjusted net income of $23.4 million, basically flat with 2018.
Cushman said the transportation industry “stands together” in “this great time of need,” referencing the company’s recent collaboration with other carriers to create load boards and discuss other opportunities.
Read the full story HERE
Source of original story and credits: freightwaves.com
