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<blockquote data-quote="Ricochet1a" data-source="post: 724614" data-attributes="member: 22880"><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">If FedEx is ever forced to sign a collective bargaining agreement with the wage employees, its profit margin will only be slightly impacted. UPS has a union and healthy profits. </span></span></p><p> </p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">What would happen is that FedEx would have to restructure some things that it doesn’t want to restructure. By my calculations, it would have to raise Express rates by 2%, dump 2,500 salaried support staff that are part of the bloat in Memphis and extend the life cycle of equipment and technology past what it currently does. By doing this, Express would easily create enough funds to pay for $1 Billion USD increase in wages and benefits for approximately 50,000 wage employees which are being under compensated right now – amounts to $20,000/year increase in compensation per FT equivalent wage employee in the Courier, RTD, CSA, Ramp Agent and Mechanic classifications. Its profits wouldn’t suffer, unless there was a mass exodus of customers over a 2% rate increase…</span></span></p><p> </p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">In the past, FedEx stated that it competed on the basis of service provided and not price charged; we all know this has changed. In order to compete on a price basis and not cut service, there is only one option for FedEx to take, pull that “missing” revenue out of wage employees’ compensation. Ground has been ruthlessly structured to compete solely on the basis of price AND to grab as much market share as possible from UPS in the process. When Ground drivers do the exact same work as UPS drivers, yet receive only about 35% of the compensation as the UPS drivers, one can easily see where Ground is making its profits while charging less for shipping. </span></span></p><p> </p><p><span style="font-size: 12px"><span style="font-family: 'Calibri'">By my rough calculation, each Ground driver places their hands on roughly 50,000 pieces a year. Increasing rates on each of those pieces by just 50 cents – and funneling that revenue directly towards compensating the drivers – would increase their compensation by $25,000/yr. By increasing the rates on each piece that Ground handles by $1 – funneling that revenue directly towards compensating the drivers – would increase their compensation by $50,000/yr; placing them on par with UPS drivers. If FedEx were to do this though, it couldn’t compete on the basis of price with UPS and continue to gain market share. </span></span></p><p> </p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">PSP has been tossed out the window, since FedEx believes that it can compete on the basis of price, maintain service levels and gain market share from UPS, while “recovering” the revenue not collected from keeping stagnant wages for its wage employees. Everything I’m hearing out of Memphis suggests that Fred made one screw up though – he gutted the pension plan not only for wage employees, but for everyone that isn’t in upper management or covered by a contract (the pilots). </span></span></p><p> </p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">The salaried employees in Memphis cannot organize, but when the economy improves, they’ll start leaving. Anyone under the age of 35 and has any sort of education in finance realizes that the PPP is a joke and not worthy of even being called a pension plan. Everyone older than this realizes the same but they also realize their options for finding a new career are difficult at best. Everyone realizes that FedEx is transforming from the growth company it was in the 80’s and early 90’s to a mature company that can no longer count on growth to keep the revenue stream increasing. </span></span></p><p> </p><p><span style="font-family: 'Calibri'">With FedEx having achieved the status of a “mature” corporation while still wanting to continue to grow, its sources for increasing revenue and therefore profit margins can only come from two places: deliberately keeping wages stagnant and fighting for an increase in market share from UPS. FedEx is doing both. This means the wage employees are left with but two options: accept the stagnant wages or fight to organize and maintain their compensation parity with UPS and force Fred to take a different route to maintain FedEx profitability. It would mean that FedEx would have to drop some of the salaried staff in Memphis and would have to increase rates slightly to fund the compensation increase for its wage employees. In other words, bring back PSP and compete on the basis of service and not trying to beat someone else’s rates by a few percentage points. </span></p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 724614, member: 22880"] [FONT=Calibri][SIZE=3]If FedEx is ever forced to sign a collective bargaining agreement with the wage employees, its profit margin will only be slightly impacted. UPS has a union and healthy profits. [/SIZE][/FONT] [FONT=Calibri][SIZE=3] [/SIZE][/FONT] [FONT=Calibri][SIZE=3]What would happen is that FedEx would have to restructure some things that it doesn’t want to restructure. By my calculations, it would have to raise Express rates by 2%, dump 2,500 salaried support staff that are part of the bloat in Memphis and extend the life cycle of equipment and technology past what it currently does. By doing this, Express would easily create enough funds to pay for $1 Billion USD increase in wages and benefits for approximately 50,000 wage employees which are being under compensated right now – amounts to $20,000/year increase in compensation per FT equivalent wage employee in the Courier, RTD, CSA, Ramp Agent and Mechanic classifications. Its profits wouldn’t suffer, unless there was a mass exodus of customers over a 2% rate increase…[/SIZE][/FONT] [FONT=Calibri][SIZE=3] [/SIZE][/FONT] [FONT=Calibri][SIZE=3]In the past, FedEx stated that it competed on the basis of service provided and not price charged; we all know this has changed. In order to compete on a price basis and not cut service, there is only one option for FedEx to take, pull that “missing” revenue out of wage employees’ compensation. Ground has been ruthlessly structured to compete solely on the basis of price AND to grab as much market share as possible from UPS in the process. When Ground drivers do the exact same work as UPS drivers, yet receive only about 35% of the compensation as the UPS drivers, one can easily see where Ground is making its profits while charging less for shipping. [/SIZE][/FONT] [FONT=Calibri][SIZE=3] [/SIZE][/FONT] [SIZE=3][FONT=Calibri]By my rough calculation, each Ground driver places their hands on roughly 50,000 pieces a year. Increasing rates on each of those pieces by just 50 cents – and funneling that revenue directly towards compensating the drivers – would increase their compensation by $25,000/yr. By increasing the rates on each piece that Ground handles by $1 – funneling that revenue directly towards compensating the drivers – would increase their compensation by $50,000/yr; placing them on par with UPS drivers. If FedEx were to do this though, it couldn’t compete on the basis of price with UPS and continue to gain market share. [/FONT][/SIZE] [FONT=Calibri][SIZE=3] [/SIZE][/FONT] [FONT=Calibri][SIZE=3]PSP has been tossed out the window, since FedEx believes that it can compete on the basis of price, maintain service levels and gain market share from UPS, while “recovering” the revenue not collected from keeping stagnant wages for its wage employees. Everything I’m hearing out of Memphis suggests that Fred made one screw up though – he gutted the pension plan not only for wage employees, but for everyone that isn’t in upper management or covered by a contract (the pilots). [/SIZE][/FONT] [FONT=Calibri][SIZE=3] [/SIZE][/FONT] [FONT=Calibri][SIZE=3]The salaried employees in Memphis cannot organize, but when the economy improves, they’ll start leaving. Anyone under the age of 35 and has any sort of education in finance realizes that the PPP is a joke and not worthy of even being called a pension plan. Everyone older than this realizes the same but they also realize their options for finding a new career are difficult at best. Everyone realizes that FedEx is transforming from the growth company it was in the 80’s and early 90’s to a mature company that can no longer count on growth to keep the revenue stream increasing. [/SIZE][/FONT] [FONT=Calibri][SIZE=3] [/SIZE][/FONT] [FONT=Calibri]With FedEx having achieved the status of a “mature” corporation while still wanting to continue to grow, its sources for increasing revenue and therefore profit margins can only come from two places: deliberately keeping wages stagnant and fighting for an increase in market share from UPS. FedEx is doing both. This means the wage employees are left with but two options: accept the stagnant wages or fight to organize and maintain their compensation parity with UPS and force Fred to take a different route to maintain FedEx profitability. It would mean that FedEx would have to drop some of the salaried staff in Memphis and would have to increase rates slightly to fund the compensation increase for its wage employees. In other words, bring back PSP and compete on the basis of service and not trying to beat someone else’s rates by a few percentage points. [/FONT] [/QUOTE]
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