FedEx Announces Plan To Save $120M On Costs

Discussion in 'FedEx Discussions' started by MrFedEx, Oct 11, 2012.

  1. MrFedEx

    MrFedEx Engorged Member

    Effective immediately, FedEx drivers will be required to pay for the fuel they use each day. This will save the company an estimated $90M in fuel costs annually. In conjunction with hours cuts, reductions in insurance coverage, and increased employee health care contributions, this will go a long way toward achieving the $1.7B in savings announced by FedEx Chairman Fred Smith.

    In addition, FedEx is requiring drivers to pay for vehicle maintenance. Mr. Smith will also assess a "wear and tear" charge on each vehicle to cover expenses like tire and brake replacement, vehicle cleaning, and routine maintenance items. Employees can choose to wash their vehicles on their own time at their own expense after work hours. FedEx will not provide water, soap, or cleaning supplies. This move will save FedEx an estimated $20M per year in costs.

    Effective immediately, employees must supply their own toilet paper and personal hygiene supplies. This includes paper towels, hand soap, and water. All employees will be assessed a monthly facilities charge to cover heating, lighting, and janitorial costs. This will save the company an estimated $10M in costs. Time spent performing bodily functions is now unpaid time, and must be recorded on the timecard or PowerPad. Code 101 for urination, Code 201 for defecation. If you do both at the same time, it is a code 301. Strict auditing procedures will be imposed, and the Gatekeeper will be tasked with additional bathroom monitoring tasks.

    Also being considered, but not yet implemented is an air fee, which will charge employees for the air they breathe while on FedEx property. All employees will wear a monitoring device which measures their air use while on FedEx property.

    Thank you for your cooperation, and Bravo Zulu. Fedex Cares.
  2. thedownhillEXPRESS

    thedownhillEXPRESS Well-Known Member

    This sounds exactly like the FedEx Ground business model....
  3. Goldilocks

    Goldilocks Well-Known Member

    This is 2012 Despite coming job cuts, Fred Smith says FedEx remains bullish on Memphis [The Commercial Appeal, Memphis, Tenn.] - Businessweek

    This was 2008 - WHAT HAPPENED?

    When people ask Frederick Smith what principles have guided him since the start up of FedEx thirty-five years ago he does not hesitate to answer them. He knows that the leadership tenets he learned in the U.S Marine Corps reflect on much of the success of his business. He can still recite the basic principles of leadership from memory and are firmly deep-seated in the FedEx culture.
    If you were to stop into one of the FedEx management training seminars, one could recognize the military aspects being taught. They teach all of their executives that the key to their success is to rely on their first-level managers (FedExs counterparts of NCOs), to set an example themselves, and to praise in public when someone has done a good job. In the Navy, a ships captain flies Bravo and Zulu signal flags when his crew has done a good job. At FedEx, managers place a BZ pennant on reports from subordinates that did a good job. Workers who excel get to wear a BZ label pin, and an employee who goes out of their way for a customer gets a BZ check of a $150 to $200. Besides the bonuses, these all come straight from Marine practices. These practices show Frederick Smith to be a transactional leader. Transactional leaderstend to give formal rewards and punishments, which is a practice that Smith incorporates into FedEx.
    The corporate culture of FedEx is apparent in its workers who are loyal to the company and its founder. From the very beginning of FedEx, Frederick Smith strove to provide for his employees even through the toughest of times. A position in FedEx remains one of the most sought after jobs because of the generous wages, overtime hours and benefits. Smith works hard at being accessible to all employees, he is known for visiting his Memphis office late at night and greeting his employees by name. He also offers any employee who has worked for FedEx for ten years or more to come have breakfast in Memphis with him. These are examples that show Frederick Smith to be a transformational leader. A transformation leaderinspires and excites followers to high levels of performance. Frederick Smiths employees enjoy working and want to come into work are loyal to FedEx and they understand and believe in the vision he has for the company.
    Frederick Smith also initiates structure within FedEx. Initiating structure is a leader behavior aimed at defining and organizing work relationships and roles as well as establishing clear patterns of organization, communication and ways of getting things done. Being in the Marines taught Frederick Smith the importance of having a leader, which is why FedEx has management training seminars, and they firmly believe that a strong manager will motivate employees. Frederick Smiths background in the Marine Corps may also lead him to be a more product oriented leader. He knows what needs to get done, and knows that rules and regulations will keep employees in line while making sure they stay focused on getting things done.

    the Current Economy
    With this kind of economic turmoil, Fedex is one of the first companies to feel the burdens of a weak economy:
    · Fewer people are purchasing online and shipping
    · Fewer orders of parts from B2B
    · Higher fuel charges
    · More expensive to overnight

    "Oh, the country is going to get through this and the financial markets will stabilize," Fred Smith says, but only after we go through a period of "trauma and readjustment." Smith goes on to say that the job of the management force at Fedex is to make the job easier for the people on the ground. So when the downturn came, he and management decided they had to take the first hit, in which most of the top management took a 20% pay cut. For Smith that was a $286,093 pay cut, but don’t worry about him, he has a multimillion dollar incentive package. With this kind of pay cut from the top down Fred Smith believes, “…our culture is very strong. Is it being challenged? Of course it is, but we're very confident that we will come out of this thing stronger.” What Fred means by a strong culture is Fedex's consensus on the values that drive the company and with an intensity that is recognizable even to outsiders.

    Fedex in the fourth quarter of last year lost $876 million dollars, but still managed a profit of $98 million only because of the demise of DHL who fell victim to the economy.

    As the economy continued to slip into 2009 management pay cuts were not enough:
    · Further pay cuts were made
    · Lay off excess workers
    · Shut down 14 aircraft