NEMF files for bankruptcy
Maroon NEMF tractors line a chain-link fence until they are pulled out to haul freight from the Lehighton terminal to a location in eastern Pennsylvania. KRISTINE PORTER/TIMES NEWS
New England Motor Freight, one of the top 25 largest employers in Carbon County according to labor statistics, announced plans Monday to file for Chapter 11 bankruptcy protection and wind down its operations.
“We have worked hard to explore options for New England Motor Freight, but the macroeconomic factors confronting this industry are significant,” said Vincent Colistra, a senior managing director with Phoenix Management Services Inc., and chief restructuring officer for the company. “Following two years of losses, and with continuing and unsustainable rises in overhead as well as a severe industry shortage of drivers, we have concluded that the company has no choice but to proceed with an orderly wind-down of operations in a Chapter 11 proceeding.”
Upon the recommendation of its advisers, the company determined that a Chapter 11 proceeding is the best mechanism to maximize the value of its assets for the benefit of its employees and various creditor constituencies.
Phoenix Management Services is serving as the company’s financial and restructuring adviser.
“I’m saddened and shocked to hear this news,” said Kathy Henderson, director of economic development for the Carbon Chamber and Economic Development. “This will be a big hit to our local economy.”
Commissioners’ Chairman Wayne E. Nothstein offered similar sentiments, saying, “This is another serious setback for approximately 200 hardworking employees and the job market in Carbon County.”
Nothstein said he will be speaking with Joseph Sebelin, who heads the county’s Workforce Development office, about opportunities the program has for dislocated workers and workforce training programs that are in place to help individuals who face the loss of jobs.
In a letter to the workers of NEMF, President and Chief Operating Officer Thomas W. Connery wrote, “The costs of running an asset-based trucking company have soared; with labor and benefits consuming an ever larger portion of revenue.
“After much discussion as well as consultation with outside financial advisers, it was concluded that it does not make sense to continue operations to support a business in which our margins continue to shrink, thereby resulting in significant financial losses,” Connery wrote.
“No one is more devastated than our Chairman Myron ‘Mike’ Shevell and his family, namely Nancy, Susan and Zachary. They built this company by walking hand in hand with thousands of dedicated workers like yourself. To all of our co-workers, many of whom are dear friends and our thousands of customers, the family extends sincere gratitude and they share in our collective sorrow that we could not continue to operate this great enterprise.”
The company has been a fixture in Lehighton since 1986 after it bought the former Interstate Dress Carriers facility.
According to a 2017 Times News article, an average of 80 trucks a day came in and out of the local NEMF hub on Mahoning Drive East.
At that time, Steve McEvoy, regional operations manager, said around 2 million pounds of freight were shipped in and out of the Lehighton terminal each day.
Around 200 people were employed at the local facility, including drivers, mechanics, office personnel and loaders.
According to The Wall Street Journal, NEMF’s shutdown will be the largest of a U.S. trucking company since Consolidated Freightways Inc. suddenly went under in the fall of 2002.