CNF MAKES PLANS TO FIX PROBLEMS AT EMERY
CNF Inc. said it will take a one-time second-quarter restructuring charge of $170 million to $200 million as it tries to cut losses at Emery Worldwide Airlines.
Emery Worldwide, which is expected to lose $20 million to $25 million in the second quarter, will undergo reorganization and reduction in capacity. Domestic volumes are down 30 percent from the second quarter of 2000, while international volumes are down about 12 percent.
The one-time charge will cover losses for aircraft maintenance, aircraft inventories and equipment, and losses from lease obligations.
Emery Worldwide's redesigned North American network capacity will be cut 30 percent, eliminating 16 aircraft, leaving 38 to provide heavyweight transportation services. Emery hasl also cut its workforce by 11 percent, or 900 employees.
CNF said the restructuring will better align Emery for the growth in the domestic second-day and deferred heavy air freight, projected to be 8 to 10 percent, while next-day shipments are projected to grow only 1 percent to 3 percent.
Emery will also continue to focus on its “asset light” business segments, such as international air and ocean forwarding, customs brokerage, logistics management and expedited delivery services.