Con-way rolls out steps to reduce expenses

Taking steps to combat light volumes, excess capacity and dismal market conditions, freight transportation services provider Con-way Inc. said in an 8-K filing it has introduced several expense-cutting initiatives to enhance its position in what it called a “challenging operating market.”

These initiatives, which the company expects to save it between $100 million to $130 million in 2009, come at a time when tonnage at Con-way Freight, its less-than-truckload (LTL) subsidiary was down roughly 12.5 percent year-over-year through February.

The cost reduction initiatives as outlined by Con-way include:

*suspension of certain 401(k) contributions including the company match;

*reduction of 10 percent in the salaries of Con-way Inc. President and CEO Douglas W. Stotlar and certain other members of the senior leadership team;

*base wage and salary reductions of 5 percent for all other executives and employees at Con-way Freight and Con-way Inc., including administrative services and trailer-manufacturing entities;

*a change in Con-way’s primary defined-benefit pension plan, which eliminates a provision for retirement benefit increases based on future increases in employee compensation rates;

*a change in vacation/paid time off policies (PTO) at Con-way Freight and Menlo Worldwide with respect to when PTO hours are earned and recorded as expense; and

*a reduction of 10 percent in the annual retainer paid to non-employee members of Con-way’s Board of Directors

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