DOW JONES NEWSWIRES
Con-way Inc. (CNW) cut salaries, suspended its 401(k) matching
contributions and took other steps to cut costs as it struggles
with lower demand for its trucking services.
The moves come as industry analysts have projected this year to
be one of the worst years for freight-transportation volume in
three decades or more, as weak consumer spending has prompted
retailers and other businesses to delay or reduce orders.
As such, tonnage at Con-way Freight has fallen about 13% this
year through February from a year earlier because of soft demand
and excess capacity in the less-than-truckload market.
In December, the trucking and logistics company said it would
cut nearly 14% of its work force as volumes sagged.
Chief Executive Douglas W. Stotlar said Monday that he doesn't
expect market conditions to change soon. "We're taking prudent
steps to control expense, protect our market share and conserve
capital," he added.
Salaries of Stotlar and other executives will be cut 10%, while
all other executives and employees at Con-way Freight and Con-way
Inc. will see their base wages and salaries reduced by 5%.
The company also will eliminate a provision in its
defined-benefit pension plan for retirement benefit increases based
on future increases in employee compensation rates and will change
how vacation and paid time off are earned and recorded as
expenses.
The steps, expected to save from $100 million to $130 million in
2009, are to be completed early in the second quarter.
Stotlar said the cuts will be reviewed once the economy begins
to recover and business returns to more normal levels.
Con-way's shares closed Monday at $13.20, down 1.2%. The stock
price has fallen 76% in the past seven months.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com