Fort Smith-based trucking company ArcBest is reducing pay for its salaried employees and reducing hours for hourly nonunion workers in the face of the coronavirus pandemic, according to a filing the company made with the Securities and Exchange Commission and a letter from the company's president and CEO to its employees.
In a move to preserve cash and in the face of falling business volume, ArcBest in addition to the pay cuts, instituted a noncritical hiring freeze, a freeze on any pay increases and will no longer match employee 401(k) contributions.
The company's board of directors approved the salary cuts of 15% to all of ArcBest's executive officers and others executives and non-union employees effective the first pay period in April, according to a form 8-K filed with the SEC on Tuesday. The reduction also affects the hours worked by hourly non-union employees.
In the SEC filing, the company said the expense reductions, along with changes in non-union compensation and benefits will range between $15 and $20 million. The company's plan could also include workforce reductions to meet business levels, according to the filing. Capital expenditures for 2020 are expected to drop by about 30%, and should be in the $95 million to $105 million range.
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According to a letter given to employees Monday and signed by ArcBest's chief executive officer Judy McReynolds, ArcBest will reevaluate the moves in 90 to 120 days. In late March, ArcBest said it was preparing for slower business as a result of the virus outbreak.
ArcBest shares closed at $19.19 in trading Tuesday on the Nasdaq, up 70 cents or nearly 4%. Shares have traded as low as $13.54 and as high as $34.45 over the past year.
The American Trucking Associations' For-Hire Truck Tonnage Index was up 1.8% in February, a solid month for the industry, according to Bob Costello, the group's chief economist.
"With truck tonnage up nicely from a year earlier in February, the trucking industry was in a fairly good place before economic impacts hit from the health crisis," Costello wrote in a news release. "Trucking volumes, early in the COVID-19 emergency, will be positive for consumer staples and other commodities before we see a slowdown as the economy contracts in the second quarter."
Recently Lowell-based P.A.M. Transportation Services Inc. laid off about 65 workers. USA Truck in Van Buren said it reduced staff by about 60 over the last quarter but the cuts weren't related to the coronavirus. Lowell-based J.B. Hunt has directed employees who can to work from home to do so, has offered paid time off to employees who are unable to work and offered a $500 bonus to drivers and support staff.
Business on 04/08/2020