Checker Motors Corporation - History - 2000s

2000s

In 2008, due to the Late-2000s recession and high gasoline prices, sales at GM and other automakers plummeted. As a major supplier to GM, Checker saw its sales drop significantly. The company had net sales of $61 million in 2008 and projected 2009 sales of only $34.5 million, a decline of 43%. During the summer of 2008, Checker employed about 340 workers.

While the US economy was in full recession, Checker Motors CEO David Markin fell victim to to the Ponzi scheme started and run by Bernie Madoff. David Markin's name appears five times on the official list of Madoff victims. One address on the list was 2016 North Pitcher Street, Kalamazoo, the same address as Checker Motors Corp.

On January 16, 2009, the 87-year-old Kalamazoo company filed in U.S. Bankruptcy Court in Grand Rapids, Michigan. Escalating raw material prices and dwindling sales for their 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 LLC, Ford Motor Company, Navistar International and GM Shanghai. 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 Late March 2009, a committee of unsecured creditors in the bankruptcy case asked U.S. Bankruptcy Court Judge James D. Gregg to consider whether negotiations between the union, United Steel Workers Local 2-682, and Checker Motors can 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.

In May, Checker was given permission to enter into agreements with General Motors Corp. that were intended to help the bankrupt supplier stay afloat until it could negotiate the sale of itself to a new owner.

In Late May, Checker announced that they found a potential buyer, The Narmco Group.

On June 9, 2009, Judge Gregg approved the sale of Checker Motors Corp. to the subsidiaries of two Canadian automotive suppliers, Narmco Group LLC and Van-Rob Inc.

The Narmco Group, based Windsor, Ontario, paid $650,000 for Checker's business of making stamped metal and welded assemblies for GM trucks and other vehicles. Van-Rob Inc., based in Aurora, Ontario, paid $950,000 for some of Checker's manufacturing equipment.

Christopher Grosman, an attorney representing Checker Motors, told Judge Gregg that the offers from Narmco and Van-Rob represented the ``highest and best value to Checker's creditors. Grosman said much of the company's machinery could not be sold because, in the wake of downsizing throughout the automotive industry, the market has been flooded with similar equipment.

The $1.6 million sale meant the end of the road for Checker. Approximately 125 Checker workers in Kalamazoo made parts until June 30, then the business was transferred to Canada.

In July 2009, General Motors Corp paid $1.5 million dollars to Walker Tool & Dies for tools and dies that remained on site at Checker. Walker Tool had liens on the tools, so payment was required in order to move the tools to Canada. The tooling was transferred to Canada to make the Buick Lacrosse.

On January 14, 2010 the Checker Motor Company ceased to exist with the sale of its Kalamazoo headquarters. It was purchased for just under $3 million by a holding company, the Jones Group, which will sell off the assets and clear the 72 acres. Checker president David Markin was quoted in the New York Times, "It's finished. Our family is very distressed about the closing of the company, but it became inevitable."

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