Compliance Overload

[AvgJoe]

I am sick and tired of seeing our stock price languish for the past few years while Fed Ex continues to be the golden child of Wall Street. Let's be honest, they beat us hands down in Marketing and Public Relations. We are too busy doing our many iterations of our whiteboard commercials with that dude with the bad haircut and being the official deliver of Nascar. Whoo hoo! When are we going to wake up and realize that Wall Street does not give 2 cents about our social responsibility. Who cares how many natural gas package cars we have? Who cares that we are on the Global Green 100 list? See all the awards we have won (link below) that have not impressed Wall Street. Or, maybe our stock price would be lower without these awards?

http://www.ups.com/pressroom/us/awar...ty.syndication

We put more money into these programs and more importantly assign management resources to run them. How many management people have been assigned to Internal Audit for the compliance audits (i.e SOX, Segregation of Duties, Compliance, Risk, etc...). Not to mention there are more external auditors working on the same thing our internal auditors do. It goes on and on. Sure, we are very compliant but does any other company spend as much as we do on Compliance activities (percentage of revenue)

If we have another management layoff (as rumored), I am willing to bet that those who manage our Supplier Diversity program and Internal Audit will not be affected. Instead, they will get rid of the front line supervisors and managers that execute our failed strategy. How many Grade 18's sit in Corporate working on "a project" with no one working for them? We are so top heavy. How many managers are "on the bench" or on "special assignment" from the last Region and District consolidation? Look at SCS. Why was that subsidiary allowed to run so poorly, operating in the red for many years, spending millions without a solid strategy. Why are the upper management that ran SCS never demoted or fired? Why did we purchase Overnite whose infrastructure has been neglected? We keep buying new tractors and upgrading their technology yet many of their vehicles and trailers have not been rebranded yet.

What's the solution? A wholesale management shuffle from the top down and huge culture change. No longer can we have a guy that can dispatch the hell out of a package center making stategy decisions for our organization.

The decision to go public only benefitted a select few who had a great base of stock (earned by many splits over the years when we were privately held) I still remember being told when I was first promoted that I would be a multi millionaire when I retired. How many of you can say that now with virtually flat growth since we went public?

Is anyone else upset about the direction of this company?

[1989]

"UPS is the most profitable of its peers, we think by funneling substantially more package volume through its efficient assets," Keith Schoonmaker, an analyst at Morningstar, says in a research report. "Keys to its profitability are high utilization, an integrated organizational structure, efficient operations, and excellent drivers. Although FedEx (FDX) express and ground units together handle more than 6 million average parcels daily, UPS moves more than 2.5 times the volume through its sophisticated delivery machine. This enables UPS to cover the United States with a highly integrated web, filling its trucks and facilities with a huge flow of parcels."


Morningstar pegs the fair value of UPS stock at $70 a share, but warns "performance is tied to the health of the global economy, and we believe shipping volume will not recover for several quarters."

[DS]

AvgJoe...your post is right on and eloquently presented.I think your views were well stated to the point that you are a tad more than just an average Joe.I am a service provider that can only sit back and watch as our sups try to provide the unattainable numbers that are expected of them.I realize that even though it seems to us drivers that WE are the only part of ups that provides that weekly paycheck to every upser,that it takes a lot more to run a company this big.I've read the posts about telematics,pickup compliance,and discipline for production issues,and I believe that the money they think they are saving could be better spent on some creativity in advertising.I also honestly believe that the ones at the top making the decisions now have lost touch with what Jim Casey envisioned all those years ago.The only thing that could destroy a company as prolific as ups is that third deadly sin, "greed".
Scott Davis would do well by checking the browncafe daily to get us back on track.Let's have some customer satisfaction compliance instead.

[Hoaxster]

Originally Posted by AvgJoe

Is anyone else upset about the direction of this company?

I don't know of a single management person who is not (or at least confused or frustrated).

I think it is about time for "A Talk With Joe". (2009 version)

Of course, the "old" Joe was a District Manager who, even in today's UPS, was a partner in the company.
The old "Talk With Joe" story was a motivational tool to encourage one to be a partner/owner in the company.
The partnership culture has gone by the wayside for the younger management ... UPS is just another big corporation to them.

[peacock71]

Originally Posted by Hoaxster

I don't know of a single management person who is not (or at least confused or frustrated).

I think it is about time for "A Talk With Joe". (2009 version)

Of course, the "old" Joe was a District Manager who, even in today's UPS, was a partner in the company.
The old "Talk With Joe" story was a motivational tool to encourage one to be a partner/owner in the company.
The partnership culture has gone by the wayside for the younger management ... UPS is just another big corporation to them.

Funny how that most of AVGJOE's post could have been written in 1989...except we didn't have the acquisitions, and there was a lot more dino-DNA around then stopping the wheels of progress. I would like to see the stock price a lot higher, who wouldn't? However, I do like what UPS is doing with sustainability. When SCS was started we all saw the lack of investment in IT infrastructure and short cuts being taken. All of our IT pros were frustrated by that, but operators were running that effort. I hope that is on its way to being corrected. I think the Overnite acquisition is a good one, and UPS & FEDEX will take the LTL market especially on any economic recovery. The biggest mistake I see UPS making is allowing the culture of partnership to weaken....its a big concern. Never put all your eggs in one basket.

Go UPS!
P71

[peacock71]

The other concern is how we areallowing FEDEX to portray themselves as the only relliable game in town with Express...its incredulous to me to see them advertising and testifying to this lie, and UPS never calls them out on it. Its a real head in the sand approach.

Go UPS!
P71

[randomUPSISer]

Originally Posted by Hoaxster

I don't know of a single management person who is not (or at least confused or frustrated).

I think it is about time for "A Talk With Joe". (2009 version)

Of course, the "old" Joe was a District Manager who, even in today's UPS, was a partner in the company.
The old "Talk With Joe" story was a motivational tool to encourage one to be a partner/owner in the company.
The partnership culture has gone by the wayside for the younger management ... UPS is just another big corporation to them.

I would be inclined to blame that on the management committee. I can't tell you how many "younger management" came in expecting a partnership relationship only to see it continuously erode each year.

UPS turned itself into just another big corporation on them. At some point you cant expect they wouldnt begin to act back in the same regard.

[randomUPSISer]

Originally Posted by peacock71

The other concern is how we areallowing FEDEX to portray themselves as the only relliable game in town with Express...its incredulous to me to see them advertising and testifying to this lie, and UPS never calls them out on it. Its a real head in the sand approach.

Go UPS!
P71

I would say UPS is at least attempting in regards to the FAA re authorization bill. Fedex can only claim that since it is extremely unlikely they will ever be unionized so long as they have the special airline protection going on.

Speaking of that, I dont think it helps that UPS is jerking the aircraft maintenance guys around with their contract. The air maint union has billboards up in louisville now stating that they could go on strike causing UPS to not be able to deliver your package. I'm sure fedex will eventually use that to its advantage.

[AvgJoe]

I feel for our partners in the District. They are continually asked to do more with less. What do they get in return? Consolidation and reorganization again and again and more cost cutting. Less routes and longer hours for the drivers. What happened to the concern of drivers working over 9.5 hrs in a day? What does that do to the work life balance of the center management team?

I long for the days when we were private and the stock went up every quarter with the exception of "The Strike" period. You could count on it splitting every few years which really helped your base. I read the various analysts opinions. They are all over the board. We could beat analyst expectations and our price would go up marginally. Fed Ex would ride our coat tails on our performance results (only if it was positive). It just seems that it is never reciprocated when it is the other way around (unless negative). How many of you secretly hoped UPS would buy the outstanding shares when we we reached a low of $38 and take us back to being a private company? I know, a pipe dream. I love this company and it's outstanding history. I work hard to provide excellent service every day and expect the same from my employees. I hope that all the money I give to UPSPAC and my letters to my senators will help with the FAA reauthorization bill but I would not be surprised if it dies in a committee somewhere. I agree the partnership has eroded. Maybe the management committee needs to re-read "A talk with Joe"?

We must revise the stock ownership guidelines. For example, a manager must have 2.5 times his annual salary in UPS stock to get the full one month of salary stock incentive. That equates to almost $250K! Would any money manager in their right mind advise a UPS manager to have that many eggs in one basket (assuming their total financial portfolio is mostly made up of UPS stock) in order to receive the full amount of additional incentive? I think division level mgrs are required to have 3.5 times their annual salary. Ludicrous policy for any public company, especially in this economic environment. Wake up salary and management committees!

[randomUPSISer]

Originally Posted by AvgJoe

I agree the partnership has eroded. Maybe the management committee needs to re-read "A talk with Joe"?

That assumes that the management committee cares about the partnership. I doubt very much they do. The reality is that there is still a partnership at UPS. Its for LTIP and higher participants now.

Originally Posted by AvgJoe

We must revise the stock ownership guidelines. For example, a manager must have 2.5 times his annual salary in UPS stock to get the full one month of salary stock incentive. That equates to almost $250K! Would any money manager in their right mind advise a UPS manager to have that many eggs in one basket (assuming their total financial portfolio is mostly made up of UPS stock) in order to receive the full amount of additional incentive? I think division level mgrs are required to have 3.5 times their annual salary. Ludicrous policy for any public company, especially in this economic environment. Wake up salary and management committees!

Agree. No one who is remotely savy with stocks would hold such a high amount unless it represented a relatively low percentage of their entire nest egg (doubtful) or if they actually had a meaningful power to impact the stock price. (Level 20 and higher perhaps?) For the average center manager, IT professional, full time supervisor, or anyone else it would be playing financial Russian roulette for a relatively small reward.

[UPSIUFan]

Sorry.

Only a total idiot would have ANY stock in the company he works for. Just as the people who worked for Enron......did you NOT READ anything about that and learn from it at all??!




The UPS partnership is a total joke.


Taking half our MIP away, and laying off management randomly like we are nothing but numbers now is pretty much all the nails they needed for putting the 'partnership' in the coffin.


Its too late now, the partner ship is dead, buried, and rotting in the ground.

[AvgJoe]

IU...Speak for yourself. One look at our balance sheet (audited by a legit firm unlike Enron), you would never compare UPS to Enron in the same breath. A smart investor would have a balanced portfolio and not have all his eggs in one basket. Based upon my age, that includes stock in a blue chip and AA rated company like UPS. That doesn't mean I still don't have problems with how the company is run and the stock ownership guidelines / additional MIP incentive. If you are in mgmt, you have to have some UPS stock because they defer 50% of your award each year. The partnership is obviously not the same as it was when we were private.

[Dis-organized Labor]

There is an honor to the 10 year anniversary to the IPO on UPSers.com

At one time, there was talk about buying "UNits" of UPS/OPL; selling UPS and loading up on OPL.....

[randomUPSISer]

Originally Posted by Dis-organized Labor

There is an honor to the 10 year anniversary to the IPO on UPSers.com

At one time, there was talk about buying "UNits" of UPS/OPL; selling UPS and loading up on OPL.....

OPL?

[Dis-organized Labor]

Originally Posted by randomUPSISer

OPL?

Overseas Partners Limited (A Bermuda Corporation).
They provided Re-Insurance of packages until the IRS got involved and fined us big bucks, we eventually recovered from them.

[dragon]

If you have any doubt how confused we are, yesterday our helper strategy and SPC changed 3 times by 5pm. I just got off the phone with the PDS and it changed again overnight. Go figure.

Atlanta - please leave me alone to run the business, I will make you money - period!!

[Dis-organized Labor]

I hear the "Partner" term when someone wants some more of my $$, time or both.
I am trying not to dwell on it, but our senior execs taking a huge pay raise while lower management gets nothing really didn't motivate me.

[randomUPSISer]

Originally Posted by Dis-organized Labor

I hear the "Partner" term when someone wants some more of my $$, time or both.
I am trying not to dwell on it, but our senior execs taking a huge pay raise while lower management gets nothing really didn't motivate me.

It actually served to de-motivate the entire company. IMO, reducing (or freezing) pay for all your employees because of "hard times", while also raising your own pay wreaks of bad leadership qualities.

I think everyone realizes that those couple million raise for a couple people wont affect the bottom line significantly, but... it still sends a bad signal to "the men" in the platoon.

[Hoaxster]

Originally Posted by Dis-organized Labor

I hear the "Partner" term when someone wants some more of my $$, time or both.
I am trying not to dwell on it, but our senior execs taking a huge pay raise while lower management gets nothing really didn't motivate me.

Originally Posted by randomUPSISer

It actually served to de-motivate the entire company. IMO, reducing (or freezing) pay for all your employees because of "hard times", while also raising your own pay wreaks of bad leadership qualities.

I think everyone realizes that those couple million raise for a couple people wont affect the bottom line significantly, but... it still sends a bad signal to "the men" in the platoon.

I agree ... even if the raises actually occurred in 2008 and the reporting of them looked as if they occurred in 2009.
Still does not motivate the people down in the trenches.