Cannon Under Fire for ?Kiwi? Recruits

A North Little Rock man who has charged that Springdale truckload carrier Cannon Express Inc. reneged on an agreement to pay him for importing foreign drivers said he will continue to supply trucking firms with drivers from Australia and New Zealand.

Cannon, like many companies in the industry, is chronically short of drivers and acknowledges that Farish Kincaid and his partners are responsible for importing at least 130 drivers, or almost one-fifth of its driver workforce. Drivers from Australia and New Zealand are referred to in the industry as, “kiwi drivers.”

But Dean Cannon, president of Cannon Express, said the lawsuit filed by Kincaid and two others trying to force his company into involuntary bankruptcy is without merit and will be challenged. Cannon said the suit has hurt company sales.

“Yeah, it has damaged our business,” he said. “A lot of people didn’t understand that we didn’t file bankruptcy. We’ve not done this, and we have no intention of doing this.”

Kincaid, Felix Pruss of North Little Rock and Ed Bennett of Little Rock filed the petition May 22 in U.S. Bankruptcy Court in Fayetteville to force Cannon Express into Chapter 7 bankruptcy. The men claim Cannon Express owes them $1.3 million for recruiting the drivers, obtaining work permits through the U.S. Department of Labor and the Immigration and Naturalization Service for each, and delivering them to the company.

“I acted as an agent for Mr. Cannon,” Kincaid said. “We had an agreement that he would pay so much, and I was to pay the other people that worked on this. He’s getting the benefit of the work that we put in.

“My job was to get the paperwork through and to also supply the drivers. I hired the people overseas. He had 246 trucks empty at the time that I placed this application in with the Department of Labor and the INS. I worked with it for about four months. He paid myself and another fellow partial payment.”

Cannon, citing legal concerns, declined to comment on details of the lawsuit.

“There are various contracts that [Cannon] has entered into with these gentlemen,” said William G. “Greg” Almand, a Little Rock attorney representing Kincaid. “He has decided he’s not going to pay them. And that’s not the way you deal with contractual obligations anywhere in this country.”

How Not to Do It

Kincaid learned the difficult business of importing labor from the mistakes of others, he said, while working at Harold Ives Trucking Inc. of Stuttgart. Ives obtained some foreign drivers through a Jacksonville man, Peter Ruston.

Ruston, an Australian citizen, recently pleaded guilty to visa fraud and money laundering in U.S. District Court at Little Rock. Ruston signed a plea agreement March 13 with U.S. Attorney Michael Johnson, promising to provide information. In exchange, Johnson agreed to drop numerous other federal charges.

“Harold didn’t want to be doing anything illegal,” Kincaid said. “I found out that what Mr. Ruston was doing was illegal.”

The drivers imported by Ruston worked at several Arkansas companies in the late 1990s, including Harold Ives, CalArk International Inc. of Mabelvale and B&D Transport Inc. of Benton. Through companies such as Worldmaster Inc., Zapalong Inc. and Outback Transportation, Ruston imported the drivers using false visa information, according to the plea agreement. Ruston maintained seven separate accounts at National Bank of Arkansas in North Little Rock and one at NationsBank [now Bank of America] in Little Rock.

Harold Ives Trucking was acquired last year by Covenant Transport Inc. of Chattanooga, Tenn., one of the nation’s largest truckload carriers.

Kincaid worked with INS agents and learned that drivers could legally enter the United States for 8-9 months with proper documentation, he said, and recognized the value of such an operation to driver-strapped trucking companies.

“That truck costs you $175 a day for every day it sits there without a driver on it,” he said.

Doing the job legally is time-consuming and labor-intensive, Kincaid said.

“It’s a slow way, a hard way,” he said. “You have to work on it every day.”

A Different World

Kincaid formed a new company, American Driver Ltd., in April and plans to make use of his knowledge and contacts in Australia and New Zealand.

“I’m working on it for a couple of other trucking companies,” he said.

Drivers from Australia and New Zealand have found favor among U.S. employers because of their experience navigating large rigs over long distances, but Kincaid has considered importing drivers from elsewhere, he said.

“I have looked at England, and I have looked at South Africa, and I have looked at the Common Market [European Economic Community] drivers,” he said, but he added that his contacts in Australia and New Zealand have allowed him to do business without visiting either nation.

Cannon Express, a publicly traded company with annual revenue of more than $90 million, has struggled financially ever since its largest customer, Wal-Mart Stores Inc. of Bentonville, cut its business with the company in half two years ago. The drivers, though filling empty trucks, may not help as much as the company had hoped, Cannon said.

“It’s different for them,” he said, explaining that the company has invested more time and money than it had planned on training.

“For openers, they drive on the other side of the street [in their home country],” he said. “They’re not used to driving in this type of traffic, [but are accustomed to driving] hundreds of miles and not even [seeing] anybody.”

In response, the company has had to offer “a rather extensive” training program, Cannon said, something it wasn’t expecting with experienced drivers.

Cannon stock, traded on the American Stock Exchange, closed July 2 at $1.70 per share, compared to its price of $1.10 on the day the lawsuit was filed.