Customers taking backseat to stockholders

[JustTired]

In my opinion, the worst thing this company ever did was to go public with the stock.

It has switched the entire focus of the company. Gone are the days when the stock price was controlled by the BOD. Those that are in positions at the top had watched their predecessors retire as multi-millionaires. Now, it's not a given that they will be in the same position.

While cutting costs is a must for any company to stay viable, there is a point of diminishing returns. Those cost-cutting measures that sacrifice customer service are tantamount to "biting the hand that feeds you". When implementing cost-cutting measures, you need to "get the big picture" and project what implementing those measures will do to customer service. I don't think that IE can see any further than the piece of paper that is in front of their nose.

I've always had the impression that the company only considers those that ship through us as the customer. Not those that we deliver to. While the money may come from those shippers, it ultimately comes from those that place the order. No orders.....no shipper. I consider both to be customers and treat them accordingly.

If we continue to try to please the stockholder at the expense of the customer, then we get what we deserve. The stock will only be a piece of paper if the customers are gone. JMO

[over9five]

You'll never get anywhere with UPS with THAT kind of thinking!

[brownmonster]

Spot on.

The problem is also that the company is not taking care of shareholders. The stock has done nothing for 4 years. As far as I am concerned we have upset customers and upset shareholders.

[freeloader]

I agree, the whole company changed focus after the IPO. It wasn't obvious right away but over the years it has become quite obvious. There are plenty of people in the same boat as you but unfortunately there is little that can be done. Some management agree as well, and many of them have simply cashed out and moved on.

[brownIEman]

JustTired,

nail, head, bang. One of UPS great strengths has always been our incredible ability to control costs. It has amazed me over the years the times we have been looking at a potentially loosing quarter, so we start tightening the belt, and manage to control costs enough to not only avoid a loss but make a great profit. The problem is, slowly over the last several years, that strategy has seemed to be the only answer we have to the increasing competitive market we are in. We have more or less continually lost market share for the last 12-15 years, but have managed to continue making large profits due to the fact that the market as a whole has grown so much and our ability to "trim the fat" as it were.

Right now however, we are facing 2 new and very dangerous realities, IMHO. 1, the economy is slowing so we can no longer rely on the growth of the market to increase our volume, we must not only stop loosing market share, but gain some of it back. 2, we have relied on "trimming the fat" for so long, that we have become blinded to the fact that in many cases we are not trimming fat, we are in fact trimming muscle (that being, the ability to service the customer and service him well).

It does not take a genius to see that reality number 2 is going to make reality number 1 damn near impossible to address. If we cannot service our customers well, we will not be able to win new ones.

[Baba gounj]

Originally Posted by brownIEman

JustTired,

nail, head, bang. One of UPS great strengths has always been our incredible ability to control costs. It has amazed me over the years the times we have been looking at a potentially loosing quarter, so we start tightening the belt, and manage to control costs enough to not only avoid a loss but make a great profit. The problem is, slowly over the last several years, that strategy has seemed to be the only answer we have to the increasing competitive market we are in. We have more or less continually lost market share for the last 12-15 years, but have managed to continue making large profits due to the fact that the market as a whole has grown so much and our ability to "trim the fat" as it were.

Right now however, we are facing 2 new and very dangerous realities, IMHO. 1, the economy is slowing so we can no longer rely on the growth of the market to increase our volume, we must not only stop loosing market share, but gain some of it back. 2, we have relied on "trimming the fat" for so long, that we have become blinded to the fact that in many cases we are not trimming fat, we are in fact trimming muscle (that being, the ability to service the customer and service him well).

It does not take a genius to see that reality number 2 is going to make reality number 1 damn near impossible to address. If we cannot service our customers well, we will not be able to win new ones.

Well it would be nice if mgt would remember what the " S " in UPS means.

[brownIEman]

Originally Posted by Baba gounj

Well it would be nice if mgt would remember what the " S " in UPS means.

Most of them do. Unfortunately, many have become blinded by the need to reduce cost in order to stay competitive and have allowed themselves to become convinced that we can continue to trim costs as we have been and yet still continue to provide that "S" to our customers.

And unfortunately, as freeloader pointed out, some management have cashed out and moved on. The total compensation package for management is not what it used to be relative to the industry and economy as a whole. Over the last several years the health coverage has been restructured, the stock bonus has been restructured, raises have been frozen at a set level, and just this past year the pension has been restructured for newer management. Most of this in the name of controlling costs.

By and large, who do you imagine are the management folks cashing out and moving on? The unimaginative, un-energetic ones that are going to be less likely to make a big impact quickly elsewhere, and incidentally would be less equipped to make positive changes at UPS? OR would the go-getters who know they can jump into a new organization and move up quickly, and who would also be better equipped to help redress problems here at big brown?

By and large, in this sort of situation, it is the very people you need to stay that will be more likely to migrate elsewhere.

Originally Posted by brownIEman

By and large, in this sort of situation, it is the very people you need to stay that will be more likely to migrate elsewhere.

Don’t know if you’re aware of it or not but a lot of us maintain contact with current managers and do our best to network with and headhunt them.

We’ll cherry-pick those that have skills that can be transferred to other industries because we can get them twice (or more) what you’ll get at UPS with a lot fewer headaches, shorter hours, and they won’t have intimately associate with an organized criminal enterprise called “Teamsters.”

I have helped line up things for three people that are retiring later this year. They opted to retire early rather than simply quit and jump ship, but they’re all at the top of their game, have a good 10+ years left in them, and are *highly* desired due to their position at UPS.

That isn’t the end of the world, but the fact that you don’t have a deep or well-stocked qualified replacement candidate pool *is.*

In many cases you have *no* replacement candidate pool.

Interestingly, those tasked with training and developing candidates are among those that can command a lot more elsewhere.

Quite a pickle you’re in… but there’s good money to be made at your expense, if that's any consolation.

[feeder53]

I believe that with the stocks going public, the stockholders will exact its toll and degrade the system.

[brownIEman]

Originally Posted by 92606

Don’t know if you’re aware of it or not but a lot of us maintain contact with current managers and do our best to network with and headhunt them.

We’ll cherry-pick those that have skills that can be transferred to other industries because we can get them twice (or more) what you’ll get at UPS with a lot fewer headaches, shorter hours, and they won’t have intimately associate with an organized criminal enterprise called “Teamsters.”

I have helped line up things for three people that are retiring later this year. They opted to retire early rather than simply quit and jump ship, but they’re all at the top of their game, have a good 10+ years left in them, and are *highly* desired due to their position at UPS.

That isn’t the end of the world, but the fact that you don’t have a deep or well-stocked qualified replacement candidate pool *is.*

In many cases you have *no* replacement candidate pool.

Interestingly, those tasked with training and developing candidates are among those that can command a lot more elsewhere.

Quite a pickle you’re in… but there’s good money to be made at your expense, if that's any consolation.

Oh I am aware of it. This has been going on for years. The old joke is that UPS has become the management training school for other companies.

[feeder53]

I have seen this in a number of areas where the stockholder requires more and more returns on his investment and they bleed the company dry. Then they start to liquidate the assets and then they are gone.