Corporate spin on the "big switch"

Discussion in 'FedEx Discussions' started by thedownhillEXPRESS, Jun 4, 2012.

  1. thedownhillEXPRESS

    thedownhillEXPRESS Well-Known Member

    What messaging style do you think Fedex is going to use to explain the upcoming changes?
    Normally they try to spin things so positive one would think they were passing out ecstasy in Memphis.
    I have a feeling that Fedex pretending to be a people company are over with this one.
    I fully expect a total corporate philosophy shift to just plain
    ruthlessness to their employee's. Once they get rid of the most senior emloyees, no one will even remember they used to put on a happy face.
    I expect an elimination of frontline, the SFA, and even skip level meetings.
    A new monster is about to emerge.

    What do others think?
  2. 55+

    55+ Member

    I wonder what the new top out will be ...20 bucks and hour?..and never reach it..
  3. vantexan

    vantexan Well-Known Member

    Whatever they do Express will still be an important component of the corporation. They'll need people willing to just be part-time, like housewives, students, people who have other part-time jobs and need the extra income. They have to treat them well or spend a lot of money dealing with turnover. If anything they won't have to deal with fulltimers complaining about low pay. The job will be what it is, a part-time stepping stone to something better, or needed extra income.
  4. TUT

    TUT Well-Known Member

    They are redoing the model for sure. You have to assume they'll take a bit extra for themselves, human nature. But it's possible there could be some benefits to those still employed. Perhaps not as thin of a crew at the stations that survive. Who's to say at this point, it may not be a much a hit to those that stay.
  5. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    So you're saying people should wait and see rather than get all worked up over something they don't know the details of?
  6. SmithBarney

    SmithBarney Well-Known Member

    Hows that for spin ;)
    FedEx could restructure Express division due to disappointing profits, analysts say - Memphis Business Journal

    Analysts predict restructuring at FedEx Express before October � The Commercial Appeal

    Restructuring at FedEx Express likely to resemble 2004 not 2009 � The Commercial Appeal

    FedEx set to unveil restructuring – analyst | Trading Desk | Investing | Financial Post

    Analysts are already all over this one... get those resumes polished up boys and girls... its gonna be bumpy.
  7. Ricochet1a

    Ricochet1a New Member

    Excellent summary... note they are all stories of about a week ago, when FedEx started rolling out hints of its intended changes. This was as I stated, an effort to start boosting the stock price NOW.

    Some quotes...

    Commercial Appeal

    "We believe it is reasonable to expect FDX to announce a restructuring of its Express business in the near future that will include: a reduction in head count through attrition and voluntary severance, an acceleration in on-boarding of more fuel-efficient aircraft, and a rationalization of the Express network," Broughton wrote.


    Analysts aren't sure the size or scope of the restructuring but most expect some personnel changes, although the Memphis-based shipping giant is likely to rely on buyouts and attrition. FedEx will report its earnings June 19 and hold an investor conference in October.

    CA again

    "We believe the focus will be on replacing three-crew, three-engine aircraft with two-crew, two-engine aircraft," Becker wrote. "This will save approximately $500 million annually on maintenance costs, fuel costs and crew costs. Older aircraft comprise about 25 percent of FedEx's fleet, so the bottom line impact of $1 a share is very real."

    There's half of the anticipated savings of 1 BILLION in expenses (going to become profit margin).

    Financial Post

    The analyst estimates aircraft retirements and employee severance could reach US$270-million, or US55¢ per share. This would provide an 8.5% boost to current base year earnings, while the retirements could generate another US$250-million, for a total of more than a half billion in headline restructuring.

    What the articles/analyst are missing, is that there will be buyouts/retirements of topped out wage employees, to be replaced with entry level wage employees doing the same work (at two-thirds the compensation rate) with assistance of the "technology" to be rolled out this fall to get the job done. This is where the other half a billion in annual savings are going to occur.

    Back in March, bbsam came out with the "28% of Volume" source. It is looking more and more like that rumor/source was right on the button. I couldn't verify 28% directly at the time (all domestic non-overnight volume would fit this criteria, but there was no way to have the full implementation of the master plan completed in such a short time as this July), but it does look like a significant portion of that will come from the elimination of Economy Saver service.

    I'm left thinking that 28% number may have been a number "tuned" to a specific region of Ground (anticipating the volume shiftover from Express within that region) and NOT a number that was NATIONAL in scope. If my suspicion is true, then the source of bbsam's was quoting from an expected jump in regional level Ground volume due to anticipated elimination of Express Economy Saver service.

    Using an analogy from "Mythbusters", back in March/April I stated "busted" regarding the timing of the shiftover (just wasn't enough confirming data to support "plausible"). Well now, it is beyond "plausible", but firmly in the "confirmed" category (the show never "confirms" anything).
  8. Damon77

    Damon77 Member

    Of the 10-12 topped out couriers at my station (only about 30 people here) is say only one of them is within retirement age. The rest are all in their mid thirties with mortgages and kids in college. And I don't see any of them taking a buyout.
  9. vantexan

    vantexan Well-Known Member

    Highly unlikely that couriers in their mid-30's are topped out or have kids in college. Do the math...
  10. Rhoderunner

    Rhoderunner Active Member

    Must be a Roads engineer !!! :bag:
  11. Damon77

    Damon77 Member

    Meant mid-40s. Posted on a mobile.