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Con-way Plans To Cut $100 Million of Overhead
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Con-way Inc. has launched a series of measures to cut costs, including a reductions in executive pay, suspension of certain company 401(k) contributions, and cuts in other benefits and pay. The company projects that the cost reduction actions will save between $100 million to $130 million in 2009.
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The measures include, the suspension of certain 401(k) contributions including the company match, and a reduction of ten percent in the salaries of Con-way Inc. President and CEO Douglas W. Stotlar and certain other members of the senior leadership team.
Con-Way will also implement base wage and salary reductions of five percent for all other executives and employees at Con-way Freight and Con-way Inc., including administrative services and trailer-manufacturing entities.
The company will change its vacation and paid time off policies at Con-way Freight and Menlo Worldwide with respect to when PTO hours are earned and recorded as expense. It will also change Con-way's primary defined-benefit pension plan, to eliminate a provision for retirement benefit increases based on future increases in employee compensation rates.
Con-Way will also reduce by ten percent the annual retainer paid to non-employee members of Con-way's board.
CEO Stotlar explained the need for the cuts as a necessary reaction to market conditions. He said that the less-than-truckload market remains hampered by soft demand as well as excess capacity, which year-to-date through February, caused tonnage at Con-way Freight to decline by around 12.5 percent year-over-year.
San Mateo, California-based Con-way is a freight transportation and logistics services company whose primary operating companies include Con-way Freight, Con-way Truckload and Menlo Worldwide Logistics.
The company's operating units provide high-performance, day-definite less-than-truckload and full truckload and multimodal freight transportation, as well as logistics, warehousing and supply chain management services, and trailer manufacturing. Con-way Inc. and its subsidiaries operate from more than 500 locations across North America and in twenty countries.
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