Raises for 2019

McFeely

Huge Member
AF33DF7A-BED7-484E-8046-0DAEFDA41727.jpeg
I don’t think I can post a link. Just look up the page for FedEx Employees. It’s a private group and you have to be approved.

What she said. Look for this group that has 21k members and ask to join.
 

Empty Pockets

Well-Known Member
All I know is we are working in the best economy in 50 years. Lowest unemployment since 1969. If FedEx is "hurting" under these conditions, what will it be like if we are in a real recession next year like the news is hoping for? Not only will we not be getting a raise whatsoever, but I could see FedEx reducing our pay and even moving us down a step. And of course there will be lemmings saying "just be glad you have a job."
There are lots of rumors about merging. All the vehicles are being painted the same colors. The customers cannot even tell them apart.

The last Earnings Conference call, two analysts asked if they were going to merge the companies but buried it with several other questions. OF course, they cannot give out insider information so the question was not answered. Fred S's answer shows a bit of anger in his reply. If the answer was "No," they could have said so. They did not say no.


Fedex Corp (FDX) Q4 2019 Earnings Call Transcript
Operator

Our next question will come from Scott Group with Wolfe Research.

Scott Group -- Wolfe Research -- Analyst

Hi, thanks, afternoon. So Alan, is there any way you can help us think about maybe the quarterly cadence of earnings -- just now obviously, we've got some weak trends right now, but then really tough incentive comps in the second half of the year, any help there. And then maybe just Fred, just following up on that is big picture, are you -- are there reasons why we could potentially consolidate Ground and Express networks from a delivery standpoint and then any update you can give us on the international buyout potential?

Alan B. Graf -- Executive Vice President and Chief Financial Officer

That was three, Scott. So look, as to cadence, the tax rate is going to be really spotty. I mean, we've got some -- a lot of assumptions that we have to prove and get through. We're still looking at all these pages of interpretations and regs that are coming out, it's left and right. We're dealing with (inaudible) us from everybody that you follow and international is extremely complex. So tax rate is going to be a factor in our quarter-to-quarter numbers. Don't be surprised by that.

Secondarily, again, I just can't tell you what's going to happen from the global economic standpoint. So that piece of it, the cadence is going to be the cadence. It's a little bit out of our control. We'll manage to it, but we don't want to do anything stupid and then not have the capacity that we need in the right place. So we're watching that extremely carefully.

You asked Ground; they're going to have a great year. I mean, they really are, I mean, they're going to grow fast and if we're going to hold margins are get close to hold margins on this growth with all the expansion and all the investment that they're doing and improving productivity, they're going to be really (inaudible) in '21. They're going to have a great consistent year, so that's about all I can I can tell. The other thing is that people forget that there is a reason that Express has a two-day service, it's called distance. When we need an airplane, we need an airplane. The customer really decides, which network makes the delivery. I think we've explained this over and over and over again on the margin, yes, there's always opportunities, but for the most part, we've got to fly when we have to fly, but the customer can make that decision.





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Operator

Our next question will come from Brandon Oglenski with Barclays.

Brandon Oglenski -- Barclays -- Analyst

Hi. Good afternoon, everyone, and thanks for taking my question. Mr. Smith, I really submit this question humbly as an analyst, has never run a business but I guess, at what point do we question the scale of the Express network because we've seen decade after decade of low returns, low margins; in peak economic activity, you guys can't put in a pretty good return, but you will never really crossing that threshold of covering the cost of capital. And on the call today, just looking at that the strategy is the same, put more capital, and optimize but not rightsize, I guess why not a more radical look at the business I think someone suggests a look at, integrating portions of Express or Ground or maybe even going more aggressively. Just on the overall footprint of the business. Can you talk to that please?

Frederick W. Smith -- Chairman and Chief Executive Officer

Didn't you ask me the same question in the last analyst call or somebody else asked me a similar question. Look, I -- the only way I can respond to that is, obviously, the plans and the programs we put in place were designed to create superior returns. We didn't just decided to do it for the hell of it. And it reminds me a little bit about that all adage of Mike Tyson that, you know, everybody has got a plan until they get hit in the mouth. So one of the things that always amuses me about watching a lot of things that are written about FedEx and so forth, you know, the competition has a vote and the economy has a vote.

So clearly, we've been very disappointed over the last few years with the assumptions that we made on the growth in international trade, particularly with the Trump administration. The United States policy since 1934 with Roosevelt and Secretary of State Cordell Hull was to expand international trade. And now we have a huge dispute where the United States is basically become protectionist defined as, I'll make everything, I need in my own borders. I don't need to import things and quite frankly don't particularly need to export them, despite the fact that 95% of the world's population is outside the United States.

So we have become a protectionist country. We don't agree with the Chinese position on trade either I've been very vocal about that, which is merchant (ph) dealers. I would like to sell to you, but I won't buy from you on a reciprocal basis.

So your question implies that, we have sat around and you said, quote for decades. We don't look at the business as a single segment, we've said that over and over again, you all deconstruct it into some degree, I sort of added in that today by making an exception saying we expected freight and ground to have earnings increases and margin increases in freight. And hopefully, any compression in ground due to the expansion will be very small.

So clearly as we go forward and things change of, if we don't resume any kind of international growth we would change our approach to the business, we don't have any sacred cows here. But you also have to remember in the Express business as Alan said, our domestic Express business is doing fine. It's not the issue, it's the international business that's having a problem for the reasons that, Brie, and now, I am saying to you.

Good news is that if traffic and yields materialize, the conversion rate to profitability is probably in the neighborhood of 60% because it's a network where the incremental volume goes to the bottom-line faster than any of our other activities.

In the case of TNT, I have to say I've been amazed not just with the people who follow FedEx in this industry, with the amazing dis-interest and NotPetya attack. It was the largest single attack by a state-sponsored entity in the history of the world. It has put the Ukraine on its knees. The only reason that it was less of a factor to us than it was because of the fantastic work of our IT team that went and remediated it. Had it not been that TNT had been subsidiary of FedEx, the Company would have been bankrupt. It would you just gone out of out of business.

So clearly, we should have sat and waited knowing NotPetya was coming, we could have picked up the pieces, it would have been a lot easier on us. So I think I'm going to ask Rob Carter, our CIO give you a bit of color what he was giving me the other day about the NotPetya account. To my knowledge, the only in-depth article that's ever been written by, I think it was in Wired Magazine.

And when you read that, it's like, oh, my God, this is one of the most under-reported stories in history. So to get to your point, of course, we want to make money in these networks, and we will engineer and modify them to the extent that we need to, but you've got to remember, those two things. The anticipation of continue to embrace a free trade, which was our assumption on building a lot of this stuff and then not assuming the NotPetya things are the two exogenous factors we've been dealing with. So Rob, you want to comment on this?
 

Empty Pockets

Well-Known Member
It's also a requirement in the Facebook group to post something about the robot and ask about the ADP app, so be sure to do that.
OMG, this robot story is one of the craziest stories lately. Three folks have been working on this robot for four years and finally have it able to deliver a pizza to Jimmy Kimmel. The pizza barely fit in it's cargo space which if I remember correctly, only 2.5 cubic feet. This would have been news worthy in 1984 with movies like Terminator, Batteries not Included, and RoboCop. This is new wave futuristic crap from 30 years ago. Lawd, can they not find anything worthwhile to invest in?
 

fedex_rtd

Well-Known Member
There are lots of rumors about merging. All the vehicles are being painted the same colors. The customers cannot even tell them apart.

The last Earnings Conference call, two analysts asked if they were going to merge the companies but buried it with several other questions. OF course, they cannot give out insider information so the question was not answered. Fred S's answer shows a bit of anger in his reply. If the answer was "No," they could have said so. They did not say no.


Fedex Corp (FDX) Q4 2019 Earnings Call Transcript
Operator


Operator

Our next question will come from Brandon Oglenski with Barclays.

Brandon Oglenski -- Barclays -- Analyst

Hi. Good afternoon, everyone, and thanks for taking my question. Mr. Smith, I really submit this question humbly as an analyst, has never run a business but I guess, at what point do we question the scale of the Express network because we've seen decade after decade of low returns, low margins; in peak economic activity, you guys can't put in a pretty good return, but you will never really crossing that threshold of covering the cost of capital. And on the call today, just looking at that the strategy is the same, put more capital, and optimize but not rightsize, I guess why not a more radical look at the business I think someone suggests a look at, integrating portions of Express or Ground or maybe even going more aggressively. Just on the overall footprint of the business. Can you talk to that please?

Frederick W. Smith -- Chairman and Chief Executive Officer

Didn't you ask me the same question in the last analyst call or somebody else asked me a similar question. Look, I -- the only way I can respond to that is, obviously, the plans and the programs we put in place were designed to create superior returns. We didn't just decided to do it for the hell of it. And it reminds me a little bit about that all adage of Mike Tyson that, you know, everybody has got a plan until they get hit in the mouth. So one of the things that always amuses me about watching a lot of things that are written about FedEx and so forth, you know, the competition has a vote and the economy has a vote.

So clearly, we've been very disappointed over the last few years with the assumptions that we made on the growth in international trade, particularly with the Trump administration. The United States policy since 1934 with Roosevelt and Secretary of State Cordell Hull was to expand international trade. And now we have a huge dispute where the United States is basically become protectionist defined as, I'll make everything, I need in my own borders. I don't need to import things and quite frankly don't particularly need to export them, despite the fact that 95% of the world's population is outside the United States.

So we have become a protectionist country. We don't agree with the Chinese position on trade either I've been very vocal about that, which is merchant (ph) dealers. I would like to sell to you, but I won't buy from you on a reciprocal basis.

So your question implies that, we have sat around and you said, quote for decades. We don't look at the business as a single segment, we've said that over and over again, you all deconstruct it into some degree, I sort of added in that today by making an exception saying we expected freight and ground to have earnings increases and margin increases in freight. And hopefully, any compression in ground due to the expansion will be very small.

So clearly as we go forward and things change of, if we don't resume any kind of international growth we would change our approach to the business, we don't have any sacred cows here. But you also have to remember in the Express business as Alan said, our domestic Express business is doing fine. It's not the issue, it's the international business that's having a problem for the reasons that, Brie, and now, I am saying to you.

Good news is that if traffic and yields materialize, the conversion rate to profitability is probably in the neighborhood of 60% because it's a network where the incremental volume goes to the bottom-line faster than any of our other activities.

In the case of TNT, I have to say I've been amazed not just with the people who follow FedEx in this industry, with the amazing dis-interest and NotPetya attack. It was the largest single attack by a state-sponsored entity in the history of the world. It has put the Ukraine on its knees. The only reason that it was less of a factor to us than it was because of the fantastic work of our IT team that went and remediated it. Had it not been that TNT had been subsidiary of FedEx, the Company would have been bankrupt. It would you just gone out of out of business.

So clearly, we should have sat and waited knowing NotPetya was coming, we could have picked up the pieces, it would have been a lot easier on us. So I think I'm going to ask Rob Carter, our CIO give you a bit of color what he was giving me the other day about the NotPetya account. To my knowledge, the only in-depth article that's ever been written by, I think it was in Wired Magazine.

And when you read that, it's like, oh, my God, this is one of the most under-reported stories in history. So to get to your point, of course, we want to make money in these networks, and we will engineer and modify them to the extent that we need to, but you've got to remember, those two things. The anticipation of continue to embrace a free trade, which was our assumption on building a lot of this stuff and then not assuming the NotPetya things are the two exogenous factors we've been dealing with. So Rob, you want to comment on this?

You know as most of the time I am rather critical of this company, but I really like Fred Smiths reply here. He did not pull any punches and really laid out the issues we have with the international side of the house. The current administration is really hurting our jobs, I would really not be surprised if Fred decides to play politics and look to the left for a little help on this.

The second item he talked about was the cyber attack. That really did put a hurt on TNT and it could have put a real hurt on FedEx, and it was a Russian attack, and I am happy that Fred pointed it out.
 

59 Dano

I just want to make friends!
lol Please explain how me doing what is expected of me is doing the minimum? I'm doing exactly what the company wants me to do!

As someone who is obviously in management can you please explain what the "minimum" is? Is it some arbitrary number each manager can pull out of their ass or is it an actual number?

Some people approach their jobs willing to do all that's required of them and others approach their jobs willing to do all that they're capable of.
 

59 Dano

I just want to make friends!
You know as most of the time I am rather critical of this company, but I really like Fred Smiths reply here. He did not pull any punches and really laid out the issues we have with the international side of the house. The current administration is really hurting our jobs, I would really not be surprised if Fred decides to play politics and look to the left for a little help on this.

Fred is already playing politics with this. He's completely (and IMO, intentionally) mischaracterizing the administration's stance with his "we don't need to import anything and we don't care to export anything, either" comments. Smith is as much of the old guard GOP mentality as anyone is and prefers lots of tough talk that's not backed up with anything.
 

59 Dano

I just want to make friends!
Guess I shouldn't have expected any different of an answer.

No, you shouldn't have. Or look at it this way... Some people see what's expected and set that as their finish line, others see what's expected of them and set that as their starting point.

Funny how it all works out.
 

Cactus

Just telling it like it is
Yeah. The company asked someone to shut down comments about a topic so that people wouldn't keep being unhappy about it.
BTW, this sounds like insider information.

Either the upper echelons need to run everything by Dano for approval or they send you an email about this so you can pass it along to us. Now which is it?
 

Empty Pockets

Well-Known Member
You know as most of the time I am rather critical of this company, but I really like Fred Smiths reply here. He did not pull any punches and really laid out the issues we have with the international side of the house. The current administration is really hurting our jobs, I would really not be surprised if Fred decides to play politics and look to the left for a little help on this.

The second item he talked about was the cyber attack. That really did put a hurt on TNT and it could have put a real hurt on FedEx, and it was a Russian attack, and I am happy that Fred pointed it out.

Bloomberg - Are you a robot?

We may not ever know the true reason for the losses. A friend was in a meeting three weeks ago. It was about losses and how spending was to be cut tight. The reason about TNT losing money. He basically said that we deal with $15 dollar packages, TNT deals with $5 packages, and there was no way to integrate them together. It was also mentioned that the guy who headed this acquisition was let go last year for the poor results. Maybe the virus did cost them a bundle, but it appears that it was a crappy purchase anyway and they are trying to blame it all on the virus.
 
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