FedEx Announcement October 2012/Investors

Discussion in 'FedEx Discussions' started by MrFedEx, Oct 10, 2012.

  1. MrFedEx

    MrFedEx Engorged Member

    I titled this post specifically for the purposes of search engines. When someone wants to know what is happening in reference to today's announcement it will "hit" here first.

    Dear FedEx Investors,

    From all of the press I've seen today regarding Fred Smith's restructuring announcement, analysts are very pleased with what he had to say. The stock shot-up over $4 per share and Mr. Smith promised improved dividends to go along with cost-cutting moves.

    However, here's what you really should know about FedEx and it's future from an insider (employee) perpective. First, FedEx is severely mis-managed, and the impression that this organization is well-run is simply incorrect. Simply put, the Express division is imploding. For years now, Fred Smith and his upper management team have been rewarding themselves with lavish salaries and perks. In fact, Mr. Smith doubled his compensation several months ago. Instead of investing in the company, Mr. Smith has spent millions on anti-labor legislation, and useless upgrades to an outdated, obsolete fleet of aircraft based on the DC10/MD10/MD11 family of aircraft. When twin engine jet cargo aircraft became available during the late 1980's, FedEx largely ignored them, and focused on buying many aging DC10 passenger aircraft and spending many millions converting and upgrading them to MD10 standards. These "20 year" aircraft will be scrapped or parked to rot in the Arizona desert after just a few years of service.

    The purchase of Kinko's, which was subsequently renamed FedEx Office, has been an unmitigated disaster. Mr. Smith wasted $2B re-branding Kinko's, and has created a hughly dysfunctional organization that will continue to be a drag on profitability for years to come.

    FedEx has continually made bad decisions, and will continue to do so, as long as the current upper management team remains in place. Labor troubles are imminent at the Express division as benefits and pay are cut from already spartan levels. The new generation of FedEx employee simply won't be able to be as productive as competent veteran employees, and poor pay will assure high turnover rates in positions that demand a fairly high level of intelligence and skill.

    FedEx is counting on new technology to "replace" experienced workers. Based on the utter failure of the very expensive ROADS technology, it's replacement technology (Dynamic ROADS) isn't likely to be much better. Mr. Smith's plan to replace highly-skilled workers with off-the-street replacements is not going to be successful.

    FedEx is also a haven for lawsuits, with many more potential suits (and settlements) in the pipeline. Watch for Age Discrimination, Minority Discrimination, Environmental, and Unpaid Labor class actions in the near future. For example, FedEx Express just settled a suit in California for $40M in which employees were forced to work through lunch breaks and otherwise break labor laws. More suits should be forthcoming from other states.

    FedEx Ground is likely to be a prime source of future litigation. For now, the Ground business model has been deemed to be legal. FedEx contractors utilizing underpaid non-employees who are held to true employee standards work for far less than their UPS counterparts, which is the source of FedEx Ground's tremendous cost and profit advantages over UPS. This is likely to change in the near future as litigation challenging the Ground business model makes it's way into court. Simply put, the Ground model will eventually fail the "degree of corporate control" test that differentiates contractors from actual employees.At that point, the operating costs of the Ground model will skyrocket, negating much of both the cost savings and profit promised by Fred Smith today.

    Until the current upper management steps aside, the $1.7B savings/profit goal announced today will be largely unattainable. Mr. Smith needs to be replaced with a younger, more dynamic leader with new ideas that actually make sense in the real world, not the fantasy world in which Mr. Smith apparently exists. The same can be said for much of his upper management team. Bloated salaries, poor decisions, and poor financial results seem to be their specialty. They simply won't be able to deliver on the promises Mr. Smith made today.

    Invest your money elsewhere, because placing your trust in the competence of Fred Smith is a major mistake.
  2. bbsam

    bbsam Moderator Staff Member

    Don't you think yu should put a disclaimer about how the above is opinion soloey based upon the biased, unscientific views of a group of individuals who are admittedly disgruntled employees?
  3. FedEx Ground drivers are underpaid compared to UPS drivers doing the same job. FACT.
  4. thedownhillEXPRESS

    thedownhillEXPRESS Well-Known Member

    Disgruntled employees, another reason to stay a mile away from this company (literally).
    Nearly every single employee is disgruntled....
  5. MrFedEx

    MrFedEx Engorged Member

    As someone else said...FACT. I think that the post was an opinion is quite obvious.
  6. hypo hanna

    hypo hanna Well-Known Member

    FACT. FedEx overpaid for Kinkos and knew it going in. Most analyst on Wall Street said so at the time.
    FACT. FedEx set a record in cost renaming Kinkos in 2008 to the tune of 696 million.
  7. I Am Jacks Damaged Box

    I Am Jacks Damaged Box Well-Known Member

    Disclaimers are a good thing, but I'd say that tidbit above denotes opinion.

    *Disclaimer: This is just my opinion.
  8. Monkey Butt

    Monkey Butt Dark Prince of Double Standards Staff Member

    That would be obvious to anyone who who would read this and would take action on the information in this post.
    Analysts or investors would not consider this information relevant.

    I don't question MFE's post but it is rather obvious he is a disgruntled employee and the only time investors consider employee opinion is when the workers are unionized.
  9. Goldilocks

    Goldilocks Well-Known Member

    WTH, Managers will continue to profit off of our sweat and we the couriers get nothing. They just said they had a board of Couriers who are happy what is going to happen. My question, WHAT COURIERS?
  10. Goldilocks

    Goldilocks Well-Known Member

    Someone please send them the link to BC.....
  11. Fred is my father

    Fred is my father New Member

    Not me. I'm a major fu*king psychotic homicidal maniac.
  12. MrFedEx

    MrFedEx Engorged Member

    Maybe...maybe not. It's no secret among employees that FedEx is a "smoke and mirrors" operation. A union is not required to have labor problems, and upper management's continuing eff-ups set a rather low bar for criticism and inquiry, particularly among potential investors. My take on the future of Ground is not unique, nor far-fetched. It is quite possible that the Ground scam will be undone.

    As a Libertarian and a UPS employee, my guess is that your opinion isn't relevant to anyone but participants on BC.
  13. MrFedEx

    MrFedEx Engorged Member

    "Board of Couriers"? about Hand-Selected-Ass-Kissers (HSAK), who were brought-in just to show (falsely) that Express employees agree with these moves. Stooges for Fred...that's all.
  14. Monkey Butt

    Monkey Butt Dark Prince of Double Standards Staff Member

    I always assume my opinion is not relevant to anyone but me.
  15. Goldilocks

    Goldilocks Well-Known Member

    I'm in tears, just thinking about all we have given up to make this company. Look at these ass holes....We are nothing but trash to them.....You did your job so off to the trash you go......SOOOOO DISGUSTED....
  16. Fred is my father

    Fred is my father New Member

    Fred just said during Q & A that the "cloud (cloud computing)is making many handlers and couriers unnecessary".
  17. Probably the same couriers that appear on frontline month after month. You know... The ones that look like they're reading from a script.
  18. Goldilocks

    Goldilocks Well-Known Member

    I heard that too.
  19. Goldilocks

    Goldilocks Well-Known Member

    Hoaxter, with a face like that on your avitar, I just want to kiss you....SMOOOOOCH...
  20. texan

    texan Well-Known Member


    oh well, an 11 finger guy should not wonder.