CNF to Fire 100 at Emery; Will Combine Freight, Cargo Units

CNF Inc., owner of the largest U.S. regional trucker, will fire 100 employees, or 42% of its Emery Worldwide Airlines staff, and combine air cargo and freight management units.

Palo Alto-based CNF will have $200 million in fourth-quarter costs to create Menlo Worldwide from Emery and Menlo Logistics, a manager of shipments for other companies. The 100 workers, from among Emery’s 240 employees, will be dismissed Friday, spokeswoman Nancy Colvert said. CNF shares rose $3.72, or 15%, to close at $28.72 on the New York Stock Exchange, the biggest one-day increase in at least 20 years.

The move lets Menlo sell air shipping and inventory management services through a single company to compete with such rivals as United Parcel Service Inc. and Ryder System Inc.

CNF has grounded its air fleet and relied on contractors to fly cargo for four months since a U.S. inquiry prompted by a fatal Emery crash found shoddy maintenance and unsafe planes.

“There should be opportunities to more effectively cross-sell services and potentially rein in costs,” said Dan Moore, a Stephens Inc. analyst who rates CNF “outperform.”

Chutta Ratnathicam, Emery’s chief executive, will become chief financial officer of CNF. John Williford, president of Menlo Logistics, will become chief executive of Menlo Worldwide.

Menlo Worldwide will have four divisions--Emery, Menlo Logistics, an auto parts management unit called Vector SCM and the newly created Menlo Worldwide Technologies, which will provide information technology and consulting services, she said. Vector is a joint venture with General Motors Corp., the largest auto maker.