The Great Recession severed the traditional link between pristine financial reputation and political viability.
In 2010, Republican Nathan Deal became governor of Georgia while standing at the brink of insolvency. Eight years later, despite being saddled with extensive personal debt — including more than $50,000 owed to the IRS, Democrat Stacey Abrams made a close run for the same office.
Both candidates incorporated their hard times into campaign biographies, wearing their economic setbacks as badges of experience and empathy. We may be about to see this happen again.
Last Tuesday, Jack Cooper Ventures of Kennesaw, Ga., one of the nation’s largest car haulers, filed for Chapter 11 bankruptcy protection, citing the effects of the Trump administration’s import tariffs on steel and aluminum, labor costs and $2 billion in potential liability under a teetering, multi-employer pension fund that could begin to dry up in 2025.
The executive chairman of Jack Cooper is 40-year-old Sarah Riggs Amico, who was last year’s Democratic nominee in the race for lieutenant governor. Since her loss to Republican Geoff Duncan, Amico’s name has surfaced again and again as a potential Democratic challenger to U.S. Sen. David Perdue, R-Ga., in 2020.
Chapter 11 doesn’t take that possibility off the table, Amico told me.
“I’m a novice by Donald Trump’s standards, by David Perdue standards,” she began with an exhausted, wry smile. The Chapter 11 papers had been filed only the day before.
The Perdue reference was to a trucking company backed by the senator and his cousin, the former governor. Benton Global LLC went belly up in 2015 with 577 unsecured creditors.
“I don’t think they went to the bankruptcy dance, but his trucking adventure with Sonny Perdue — they liquidated. They chose not to go through a court process, probably because of the political look,” said Amico, a 2003 graduate of Harvard Business School.
Jack Cooper is headquartered in an out-of-the-way brick building in west Cobb, with a second headquarters in Kansas City, Mo., but its 3,000 employees are scattered among 60 hubs across the U.S., Mexico and Canada – most of them east of the Mississippi River.
The company is something of an anomaly in right-to-work Georgia. Most of its employees are union members who receive health care and retirement benefits through the company. That became one of Amico’s talking points in the campaign for lieutenant governor.
Should she run for U.S. Senate, what’s happening now would form the core of that campaign. “Politically, I know this is difficult. But it’s not about optics. I’m doing this to actually fix what’s broken,” Amico said.
A plan worked out with lenders and others would put ownership of the trucking company in the hands of a New York-based hedge fund. Employees would keep their jobs and avoid wage or health benefit cuts. Amico would stay on, but Jack Cooper would no longer be a business owned by her family – as it has been since 2009.
For Amico’s company, revenues had been declining since 2016, but aluminum and steel tariffs ordered by President Donald Trump last year exacerbated the situation.
“Suppliers are getting squeezed. They’re pushing it down through the supply chain. We’re a union carrier. There is no doubt we’re more expensive than a non-union company,” Amico said. She said the company’s commitment to worker benefits put it at a 20 percent disadvantage with non-union carriers.
But it is the pension fund that has been the Sword of Damocles hanging over her company’s head.
The Central States Pension Fund is supported by 1,400 employers, including Jack Cooper. It covers nearly 400,000 union workers and retirees, but with the decline of union membership, it has become woefully underfunded.
The situation is complicated. In order to pull out of the pension fund, Jack Cooper would be required to pay billions of dollars to cover the cost of current and future retirees. But under the plan associated with the Chapter 11 filing, the trucking company would be moved to a part of the fund not saddled with the steep withdrawal fees.
The problem is larger than Jack Cooper. The pensions of about 1.3 million retirees and workers in trucking, mining and other industries are threatened by similar collapses, according to the Wall Street Journal.
Last month, the Democrat-controlled U.S. House passed a $48.5 billion bill to support such troubled pensions with low-interest, forgivable loans. Passage by the GOP-dominated Senate appears doubtful. Costs are a concern for Republicans — although, Amico noted, there was no such hesitation in 2017 when they passed a rather substantial tax cut.
“People don’t understand what this means for working families. Somehow, there’s just not the same sense of urgency to bail out a guy who stocks a shelf or a girl who drives a truck for 30 or 40 years and pays into that pension,” Amico said. “That may not be very fancy, but I don’t see any political willingness to go after these issues that hit working people.”
In that observation is the inkling of a political campaign. The company’s union workers will vote on whether to ratify the plan to salvage Jack Cooper in September. A federal judge must approve as well. Amico intends to make her decision about a U.S. Senate run in the weeks afterward.
Two Democrats, former Columbus mayor Teresa Tomlinson and Clarkston Mayor Ted Terry, are already in the contest.
Amico has kept financial contributors from 2018 abreast of the situation. “All of them have heard this story,” she said.
As she did last year, Amico would be leaning heavily on her business experience. And on her current hard times — which could strike a nerve in a U.S. economy that many experts think may be slowing by next year.
“Can you still do the right thing — pay a fair wage, pay health care and retirement and take care of your people, and can you still come out ahead? Or have we leaned into a system that incentivizes being profitable on the backs of the people who make your business possible?” Amico asked. “The pension crisis speaks to that.”
Then, the prospective candidate said, she would “draw that straight line” to the nation’s failure to make other investments — in infrastructure, Social Security and public education.
The 2020 version of Amico would probably be angrier than the one we saw in 2018.
“My view is, failures in Washington have consistently put my business in a pickle,” Amico said. As Republicans threatened to kill the Affordable Care Act, her company made sure employees had health care coverage. Washington has balked on paid family leave. Amico said her company figured it out.
“And now we’re here with the pension issue. If I’m going to do their damned job anyway, I might as well go to Washington and try to figure it out for a whole bunch more people than at Jack Cooper,” Amico said.
She quickly apologized for cursing. It had been a hard day.
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