He Taketh Away

If you’re an owner-operator struggling to keep your head above water, the last thing in the world you want to see is Barry McKinley’s black pickup pulling up in your driveway. If you do, chances are you’ve done, or more precisely, haven’t done, something to bring it there.

McKinley is a large, silver-haired and bearded man with a sort of cheerful Santa-like persona. But unlike Mr. Claus, McKinley doesn’t come bearing gifts. He’s there to take them away. As vice-president of the Collateral Recovery Administration (CRA) network and president of its subcontractor Astorville, Ont.-based McKinley Bailiff, McKinley says he’s repossessing about 20 to 25 trucks a week during these rocky economic times-that’s compared to five to 10 trucks a week a few years ago. He has taken back as many as 90 units from a single fleet and has been repossessing 2001 models since last October-a sign that the people who leased them never stood a chance from the start.

His is a thankless job, made harder by the stereotype that repo men live off of other people’s misery. McKinley, who repossesses transport, vocational, construction, and farming equipment, stresses that most truck repossessions are conducted smoothly, without incident, but admits he has encountered his share of volatile situations.

After all, taking a rig and livelihood from a 220-pound trucker is not exactly like lifting a Volkswagen from a teen-aged girl.

“The reaction of the debtor purely depends on if we have to play hardball,” he says. “Some have tried driving over us with their unit. We’ve been shot at before, once while recovering trailers down in Florida and once in Northern Ontario.”

Despite pleas from “shocked” debtors that “there must be some mistake,” McKinley says most know for weeks that the repo man is on his way.

“If we’ve been called in, it’s usually because the finance company is at the end of the line,” he says. “It has tried to collect the outstanding amount for some time. A repossession is ordered as a last resort.”

It’s at that point CRA will get a fax from the finance company or bank, which includes a letter of authorization or seizure warrant, a copy of the contract, and the vehicle’s registration. The paperwork is then handed down to a regional bailiff like McKinley, who handles Ontario and Manitoba. McKinley will summon two of his own nine bailiffs, who will hop into a black company pickup and begin the hunt, which has taken them as far away as the Northwest Territories in search of runaway units.

McKinley says the easiest way to repossess a truck is to pull it over to the side of the road or catch it while it’s sitting at a weigh scale or truck stop. In many cases the driver is not the owner of the truck, so McKinley will make arrangements to have the load delivered and driver taken home. “We’re not bandits,” he says. “We’re always aware the load belongs to someone else.”

Repos at the owner’s home can be more difficult. If the debtor is not willing to give up the unit, the bailiffs are instructed to back off and return another day. When that day comes, the bailiff will usually be accompanied by a third-party tow truck or equipped with “some fancy toys” that will allow him to enter a locked vehicle, start it, and drive away.

McKinley doesn’t work on contingency. He takes a fee for returning the trucks. Finance companies that are part of larger OEMs return the trucks to the dealer; independent banks prefer to dump them at auctions. If the lots are too full, McKinley will gladly re-market the trucks at his own yard. McKinley’s busy repo schedule doesn’t bode well for truck manufacturers, their captive finance companies, or their dealers. Lenders and financiers are “handling considerably more past-due accounts, increased delinquencies, and higher credit losses than in years,” says Rich Forsyth, marketing services director with Paccar Financial. He says depressed freight volumes and rates, combined with high fuel and insurance costs, have conspired to stretch out fleet replacement cycles and make it difficult for truckers to pay for existing equipment.

With more trucks coming back [through repossessions and voluntary returns] into a weakened used truck market, the finance companies are experiencing a greater loss on each unit, Forsyth says. As a consequence, the truck and trailer finance industry is facing large credit losses, and many companies are tightening their lending strategies.

Bob Magloughlen, a former Volvo dealer in Waterloo, Ont., working as an industry consultant, says the purse strings should have been tightened long ago. “Finance companies were competing against each other and truck OEMs to lend (buyers) money. It got absolutely ridiculous,” he says. “People were coming in and buying trucks with virtually nothing down. You just had to know some of these people were going to go bust. Obviously, [companies that sell and finance trucks] need to look longer at the customer and liabilities of the customer and say, ‘Can this guy buy this truck, fuel it, maintain it, make payments, and still make a living?'”

As for owner-operators struggling to make payments, McKinley has his own suggestion that may help keep him away from your rig. “Keep in contact with the bank or account manager at the finance company,” he says. “The last thing these guys want is the unit back. They will do whatever possible to keep it in your possession. Explain your situation and you may be able to work something out. When they call and the phone has been disconnected, that’s when they start to worry and we get called in.”

Being a former truck dealer, McKinley understands the hardships heavy-equipment buyers face. He says listening to sob stories-some fake, many real-every day has not made him any less sensitive. That doesn’t mean though, he lets emotions interfere with his job. “I empathize with these guys,” says McKinley, who takes pride in the diplomatic approach his bailiffs endorse. “But if these things really bothered you a lot on a daily basis, then this is the wrong business to be in.”

Despite knowing his business grows with every owner-operator that goes bust, McKinley doesn’t wish bad fortune on anyone. He’s just doing his job. His message: “Don’t shoot the messenger.” He probably means it literally.