Newcity named CFO at Arkansas Best

Michael E. Newcity will be the new chief financial officer at Fort Smith-based Arkansas Best Corp., possibly completing a high-level round of management changes at the less-than-truckload company that began with the Dec. 31 resignation of CEO Robert Davidson.

On Oct. 21, 2009, Davidson announced he was retiring as Arkansas Best CEO effective Dec. 31. McReynolds, then the senior vice president, chief financial officer and treasurer, was picked to succeed Davidson and become Arkansas Best’s president and CEO on Jan. 1.

On Dec. 5, J. Lavon Morton was promoted to the position of senior vice president, tax and chief audit executive; Donald W. Pearson to vice president, treasurer; and R. David Humphrey to vice president, investor relations and corporate communications.

Newcity, 40, now works as director, economic analysis for Arkansas Best and leads a group that provides analysis on topics including costing and profitability methods, incentive systems, business metrics and forecasting, according to a company statement. He has been with the company since 1993 and has held several positions at ABF Freight System and Data-Tronics Corp., both Arkansas Best Corp. subsidiaries.

He earned a bachelor’s degree in computer information systems, with a concentration in economics, from the University of Arkansas, and a master’s degree in business administration from the University of Arkansas. 

“I am pleased to have Michael Newcity lead Arkansas Best’s financial team into the future,” Judy R. McReynolds, Arkansas Best president and CEO, said in a statement. “At a very important time in Arkansas Best’s history, Michael brings a unique combination of analytical skills and innovative thinking into the CFO position. As a 17-year employee of our company, Michael values our corporate culture. He has played a significant role in the creation and development of numerous internal and external systems and solutions that have formed the foundation for ABF’s customer-centric reputation.”

Newcity comes to the job during one of the toughest financial crunches in the company’s history.

Arkansas Best, which employs about 9,500 nationwide, posted a first quarter loss of $21.39 million, compared to an $18.15 million loss in the first quarter of 2009. The company posted a 2009 net income loss of $127.52 million, compared to a $29.168 million gain in 2008. However, the 2009 income loss includes a non-cash accounting charge of $64 million for the impairment of goodwill. Total revenue in 2009 was $1.472 billion, a 19.6% dip from 2008 revenue of $1.833 billion.

The company burned through $10 million of its cash reserves during the first quarter of 2010. Unrestricted cash and short term investments were at $123.1 million as of March 31, down from the $133.2 million at the end of 2009.

On May 24 it was learned that a wage and benefit reduction plan critical to helping the company curb losses was rejected by the Teamsters.

The International Brotherhood of Teamsters reported in late April that it and Fort Smith-based Arkansas Best Corp. reached a tentative agreement on 15% pay cuts through 2013 for the roughly 7,000 drivers affiliated with ABF Freight System — the less-than-truckload carrier owned by Arkansas Best. Teamsters officials advocated for the plan by telling the union drivers the less-than-truckload carrier was burning through about $10 million in cash reserves a month in 2010. Despite the plea by union and company officials, 56% of the union drivers rejected the plan that also included wage and benefit cuts for non-union company employees.