C.W. Johnson Xpress Closes Doors. Were Chairman's Complaints Valid?

Implications:   When C.W. Johnson Xpress, a Louisville, Ky.-based truckload carrier closed in mid-August, its chairman Charlie Johnson lashed out at Louisville and federal officials for failing to aid him. Johnson's company was the beneficiary of millions of dollars in federal grants to aid underprivileged persons to obtain jobs, which many did at this trucking company. But when the grants dried up, Johnson Xpress faltered under the weight of $8.3 million in debt. The majority of Johnson Xpress's customer list has been obtained by Indianapolis-based Celadon Express.

Analysis:   There are something in excess of 2,000 trucking failures in the first half of this year, according to A.C.T. Research, which accurately tracks this data.
  Most of those companies are small operators who are too thinly financed to survive the current cutthroat trucking environment of too many trucks chasing too little freight, paying record-high diesel prices for their trouble.
  Johnson Xpress, a small operation with 116 drivers and 30 back-office workers in Louisville, Ky., continued this trend in August when it closed. It had $8.3 million in debt that was called in, and nobody answered.
  Since then, Johnson Xpress's customer list has been bought by Indianapolis truckload giant Celadon Express.
  Few outside Johnson Xpress's immediately family of workers would have noticed its closing, except for a small article that appeared in the local Louisville Courier-Journal.
  In this piece, Louisville businessman Charlie Johnson, the head of Johnson Xpress, blasted federal and local officials for letting his company fail. Specifically, he cited a federal jobs training program, which Johnson used to move at-risk people from poverty into his trucks and docks.
  The program was a success until the funding dried up under the Bush administration. Johnson traveled to Washington in 2007 to personally lobby for an extension, but was turned down.
  His reaction is still bitter. "Poor people, minorities of any kind, will receive no help from this government," he charges.
  By all accounts, Johnson's intentions were sound. He was trying to solve the deteriorating conditions in inner-city Louisville by training people for work at his trucking company. The program amounted to a $6,000 per-worker subsidy. After that dried up, Johnson says he put $4 million of his own money into the program.
  But the company failed because of higher-than-anticipated costs, including record-high fuel bills. Johnson Xpress is just one of a couple of thousand or so trucking failures this year. But it stands out for the way it operated--and the social good is was performing--before it closed.
  Founder Johnson may find his complaints falling on deaf ears in the rest of the business community. But there seems to be a glint of validity to his complaints. This nation loves to talk about bringing people up from the bootstraps. But in the end, it's usually individual desire -- and luck -- that works more often than government handouts.