Roadrunner Transportation Systems To Close 5 Terminals and Cut 450 Jobs
Downers Grove, IL – Roadrunner Transportation Systems announced in a press release sent to Transportation Nation Network (TNN) on Monday plans to downsize its “unprofitable” dry van business.
As a part of the downsize, Roadrunner will reduce its dry van company tractor and trailer fleets by over 50%, the company said.
It also plans to close five terminal locations in Burton, MI; Brownsville, TX; Kansas City, MO; Laredo, TX and St. Louis, MO.
All terminals slated to close belong to Roadrunner subsidiary, Little Rock, AR-based Rich Logistics.
A representative of Roadrunner told TNN that no Roadrunner subsidiaries, including Rich Logistics, are being completely shut down.
Roadrunner acquired Rich Logistics in February 2014 in a transaction valued at approximately $48 million.
Other Rich Logistics locations in Alexandria, IN; Dallas, El Paso and San Antonio, TX; Nashville, TN; and headquarters in Little Rock will remain in operation, but are being downsized.
The company said the downsize would eliminate approximately 450 jobs.
According to data from the Federal Motor Carrier Safety Administration (FMCSA), Rich Logistics employs 519 drivers.
It was not immediately made clear how many truck driving jobs would be lost as a result of the downsize.
“We believe downsizing the dry van business will improve operating margins and cash flow, reduce lease obligations and debt, improve internal controls and allow greater focus on the significant value-creation opportunities within our other businesses,” Curt Stoelting, CEO of Roadrunner, said in a statement.
Roadrunner said downsizing activities are expected to reduce lease obligations and debt and be substantially complete by end-of-year 2019, with workforce reductions effective over the next 60 to 90 days.
The company said the reduction in workforce represents approximately 10% of the company’s total employees.
Monday’s announcement adds to what has already been a difficult year for the trucking company.
Roadrunner faced a significant scandal earlier this year when former CFO, Peter Armbruster, was arrested in April in what authorities allege was a complex $245 million stock scam.
Armbruster and two co-conspirators, also executives within the company, were indicted on 19 counts of conspiracy, securities fraud, wire fraud, bank fraud and attempting to influence auditors to falsify the company’s books in order to artificially inflate the firm’s earnings between 2013 and 2017.
The scam drove Roadrunner’s stock price down significantly, costing shareholders approximately $245 million.
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