Abrupt Shutdown Puts 9,800 Out of Work : McLean Trucking Files Chapter 11

WINSTON-SALEM, N.C. —  McLean Trucking, the nation’s fifth-largest trucking company, temporarily shut down operations Friday and announced that continuing losses forced it to seek reorganization under Chapter 11 of the U.S. Bankruptcy Code.

The abrupt shutdown put 9,800 employees in 45 states out of work and idled about 9,000 tractor-trailer rigs, the company said.

McLean President David J. Manchick telexed the company’s headquarters here from Dallas early Friday to order the closing of the giant company whose rigs bearing the red diamond emblem have been a familiar sight on American highways for more than 50 years.

The company issued a one-paragraph statement declaring that because of continuing losses it was forced to seek reorganization and that a bankruptcy petition was to be filed later in the day. McLean officials were not available for comment.

Manchick was in Dallas, where he has been trying to arrange a loan to enable McLean to meet its payroll, the Greensboro News & Record reported.

Even though it was known that McLean has been experiencing financial troubles for the past four years, the shutdown caught many of the company’s 1,100 employees in Winston-Salem by surprise.

“No one here knows what’s happening,” said an employee at the company’s main terminal. He asked not to be identified.

Another employee, veteran driver Cephus Hill, said he was greeted with the bad news when he drove his rig into the terminal at 5 a.m. Friday from Roanoke, Va.

“They told us they had closed down,” Hill said. “It was a surprise to me, what with 18 years with the company and a family to support.”

Two men stood guard at the terminal gate, letting only employees enter and leave. Mechanics were loading their tool chests into the backs of personal trucks and leaving.

A mechanic, who asked not to be identified, said he worked until 12:30 a.m. “Everyone seemed normal when I left,” he said. “Then I got a call from another employee at 6 a.m. He said we had closed up.”

McLean employees took a 15% pay cut last year to help the company trim operating expenses. Last week, company paychecks were held up.

One man, who said he picked up his check Friday, said the bank refused to cash it.

McLean, with annual revenue of $600 million, owns terminals, trucks and the Winston-Salem office building. It lost $30.5 million in the first half of 1985. Figures for the second half have not been released.

McLean was founded in 1934 in Red Springs by Malcolm McLean. He moved the operation to Winston-Salem in 1947 and later sold the company. It now is owned by a Lebanese citizen, Issam Fares, who heads a holding company called Wedge Group.