The story
Founded by Morris Markin in 1922, in Kalamazoo.1
Pre-Checker history and its formation
Commonwealth Motors in 1919, introduced the Mogul Taxi. Commonwealth could trace its history back to the DeSchaum Motor Syndicate, later renamed Suburban Limiteds, was founded in 1908 in Buffalo, New York. The Mogul combined the sturdy Commonwealth frame with a purpose-built taxicab body from Lomberg Auto Body Manufacturing Company, which was founded in the late 1910s by Russian immigrant Abraham Lomberg in Joliet, Illinois. Soon after, Lomberg looked for further capital to increase the capacity to build the expected orders for the Mogul, and took out a $15,000 personal loan from businessman, Morris Markin. Markin had emigrated from Russia in 1913 and worked as a clothier in Chicago, Illinois, earning his fortune by winning a contract to supply uniforms to the United States Army during World War I.
However, demand for the Mogul was lower than expected and Lomberg defaulted on the loan, surrendering his company to Markin in late 1920. When Markin took over he renamed the business Markin Automobile Body. Mogul sales continued to be slow, but Commonwealth was rescued temporarily from bankruptcy by a large order from Checker Taxi in late 1920. At the time, Checker Taxi was a privately owned taxi operator based in Chicago that had no affiliation with Markin. However, the order only kept Commonwealth afloat for a short while, and eventually it was unable to repay its creditors and entered it bankruptcy in late 1921. Markin offered Commonwealth's receivers Markin Automobile Body shares for the company's assets. Markin was helped by the assets of Markin Automobile Body being valued at $182,703, a figure that was greater than its actual worth, and that it was probably the only offer on the table. The offer was accepted by the receivers in October 1921, with Markin merging the two firms in
May 1922 as the Checker Cab Manufacturing Company in May 1922.
Checker Cab produced the Mogul alongside Commonwealth passenger cars briefly, but soon began concentrating on commercial sales, introducing the Checker Model C on June 18, 1922, followed by a Mogul variant, the Model H, later that year. Markin is credited with devising and applying the brand's signature checkerboard trim to the vehicle's beltline. With the ongoing war between Checker Taxi and Yellow Cab, including Markin's house being bombed, Markin decided he needed to move his business away from Chicago. Checker Cab moved to Kalamazoo in 1923, taking over two factories previously operated by Dort Motor Car Company and Handley-Knight. In 1930, Checkers came in either black, maroon, yellow or canary.
Consolidating the taxi market
Markin gradually acquired the unrelated taxicab operator Checker Taxi of Chicago over the course of the 1920s. In 1929, he purchased Checker Taxi's rival Yellow Cab Company from John D. Hertz, who had grown weary of the decade-long Chicago Taxi War between Checker and Yellow Cab. The two operators were merged into the Parmelee Transportation Company. Yellow Cab previously had used taxicabs built by a subsidiary, the Yellow Cab Manufacturing Company, but after Yellow Cab (the taxi operator) was folded into Parmelee, both companies turned to Checker Cab instead, ensuring a steady demand for its taxicabs. Yellow Cab Mfg. had been established in 1920 and following its acquisition by General Motors (GM) in 1925, was reorganized as Yellow Truck & Coach. By that time, Yellow Cab Mfg. had begun to pivot towards producing motorbuses, but continued to manufacture taxicabs. Markin would go on to acquire the principal taxicab operating companies in New York City, Pittsburgh, and Minneapolis. From 1922 to 1928, Checker Cab made and sold 8,019 taxicabs to various operators.
Markin's captive market strategy proved sound during the Great Depression; with Checker Cab sales holding steady, the company continued to return a reliable profit. Although the year-to-date profit for Checker Cab in May 1931 was just US$665, it was still a positive profit when many automobile manufacturers were struggling, prompting GM to rename the Yellow Cab company to General Cab and to re-enter the taxicab market. However, operators took advantage of GM's generous terms which did not include a repayment schedule. General Motors withdrew from the market in 1938. Checker's strategy also attracted the attention of the federal government, which later brought an antitrust suit against Checker and Markin under the Sherman Act. Although the case was initially dismissed by the United States District Court for the Northern District of Illinois, that decision was reversed by the Supreme Court of the United States in 1947 and decided in favor of the defendants in 1948, who argued successfully that Checker Cab's successes with taxicab operators were due to the marque's inherent advantages and not the complex relationships between the manufacturer and operators: because Checker Cab's vehicles were purpose-built for the taxicab industry, operators naturally would choose them over modified passenger cars. After another appeal, the Supreme Court upheld the lower court's verdict in 1949.
When Parmelee was founded, Markin owned 12% of the shares of Checker Cab Mfg.; his share declined to 5% by mid-1930. The largest shareholder was a group led by John J. Raskob and millionaire Pierre S. duPont, which controlled 34%. 1931 was a profitable year for Checker, but that would soon change in 1932 as the depression finally caught up with the company. After several profitable years, sales collapsed and Checker started to bleed money, generating losses month after month. So bad was the economy that Checker shut down for several weeks at the tail end of 1932. In 1932, Checker Cab introduced the Model T and switched from Buda engines to Lycoming, which was owned by E. L. Cord. 1933 found many auto manufacturers in the midst of significant financial issues. Checker now needed to recapitalize. Unfortunately for Checker CEO Morris Markin, a hostile corporate takeover ensued via a series of capital transactions. The corporate board was reduced in size by the Raskob-duPont group in June 1933; the smaller board, which included duPont, subsequently voted to oust Markin.
However, Markin still retained his small share of ownership and held options to acquire a 60 percent share of the company. Ten days later Markin sold those options to E. L. Cord for less than $1 million; Checker Cab became part of the Cord Corporation and Markin was reinstalled as head of the company. With funds secured and new ownership in place, Checker Cab was integrated into the Auburn–Cord–Duesenberg (A-C-D) group, allowing Checker to operate autonomously and still draw on engineering talent from the larger group, including Auburn vice-president of engineering Herbert C. Snow.
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Three short years later Cord and Markin came under investigation by the Securities and Exchange Commission for their dealings in Checker Cab stock, which had raised the price from US$7 per share in November 1935 to $69 per share in April 1936. In order to avoid prosecution, Cord sold the Cord Corporation to the Aviation Corporation in 1937. Morris Markin bought out Cord's interest in Checker Cab and was able to secure complete control of Checker. A-C-D eventually folded in the wake of the stock scandal but the now-independent Checker continued to produce taxicabs. Between 1929 and 1942, when production was suspended for World War II, Checker Cab made 29,260 cabs.
Return to tradition
After the war, Checker Cab began developing several new models which never made it to production; the Model A2 that was introduced in 1947 was mechanically similar to the pre-war (1939) Model A. The Model A also had switched to a new engine supplier; Checker cabs now used the Continental inline-six. The A2 was introduced alongside the A3, which had a different internal configuration to seat up to eight passengers. The A2/A3 went through minor modifications as the A4/A5 and A6/A7.
In addition to taxicabs, Checker briefly built the chassis for the Series E transit buses; the primary customer was Detroit Street Railways.
In 1956, Checker introduced the A8, which continued with minor styling changes as the A9/A10 and A11/A12 through the end of Checker vehicle production in 1982. Also that year, the company changed its name to Checker Motors Corporation. The A9 was the designation for the taxicab model, while the A10 was the corresponding vehicle sold to the public as a passenger car; a similar relationship exists between the A11 and A12, which were introduced in 1961.
By the 1970s, conventional automobiles from the Big Three were replacing the purpose-built Checker Cabs; the Checker was considered "too big, too cumbersome, [and] too thirsty" as it had been built to meet obsolescent requirements.
In 1982, with the body stamping dies wearing out, production of the Checker Cab was discontinued.
Subcontracting
After winding down vehicle production in 1982, Checker Motors served as a subcontractor, supplying automotive parts and stampings to Detroit-area manufacturers.
In 1989, Checker Motors and Checker Holding Company were involved in a reverse acquisition with International Controls Corporation (Great Dane Trailers), and the company later changed its name to CRA Holdings. The company was reorganized in 1995 into three wholly owned subsidiaries: Yellow Cab (owns and leases taxicabs in Chicago), Chicago Autoworks (taxicab repair and other services) and CMC Kalamazoo. Other subsidiaries include American Country Insurance Company (a provider of property and casualty insurance), Great Dane (the largest manufacturer of truck trailers, containers and chassis) and South Charleston Stamping & Manufacturing Company. The company was renamed Great Dane Limited Partnership, and was acquired by Chicago-based CC Industries.
Purchased in August 1989, South Charleston Stamping was sold by Checker to Mayflower Corp. in November 1996. South Charleston Stamping had been owned previously by Volkswagen and supported Volkswagen automobile production in Pennsylvania in the late 1970s.
Checker Motors operated as a subsidiary of CC Industries as an automotive subcontractor, primarily for General Motors, into the 21st century. Checker made body stamping for various GMC/Chevrolet truck lines and chassis components for Cadillac. David Markin, son of founder Morris Markin, continued to act as CMC Chief Executive Officer.
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 United States economy was in full recession, Checker Motors CEO David Markin fell victim 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 its 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 March 2009, a committee of unsecured creditors in the bankruptcy case asked Judge Gregg to consider whether negotiations among the union, United Steel Workers Local 2-682 and Checker Motors could 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 it 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 in 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 had been flooded with similar equipment.
The $1.6-million sale meant the end of the road for Checker. About 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 to Walker Tool and Dies for tools and dies that remained on site at Checker. Walker Tool had liens on the tools, so payment was required 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 officially went out of business with the sale of its Kalamazoo headquarters. It was purchased for just under $3 million by a holding company, the Jones Group, which was to 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."
Private investment company Oak Point Partners acquired the remaining assets, consisting of any known and unknown assets that weren't previously administered, from the Checker Motors Corporation Bankruptcy Estate on January 31, 2018.
From Wikipedia’s article on Checker Motors Corporation, shared under CC BY-SA 4.0.4
