So, Fedex, what do you think about the paycuts?

Discussion in 'FedEx Discussions' started by upssalesguy, Dec 18, 2008.

  1. upssalesguy

    upssalesguy UPS Defender

    FedEx profit up, but cuts pay and costs
    Thursday December 18, 2:33 pm ET
    By Nick Carey

    DETROIT (Reuters) - Package delivery giant FedEx Corp (NYSE:FDX - News) reported a higher profit for its fiscal second quarter, meeting expectations, but announced a 20 percent pay cut for CEO Fred Smith and said it was suspending retirement plan contributions as the U.S. economy's outlook looks bleak.

    FedEx said it has a hiring freeze in place and has cut staff levels at its FedEx Freight and FedEx Office units.

    FedEx said new measures include a 20 percent base salary decrease for Smith and pay cuts of between 7.5 and 10 percent for other senior executives as of January 1. All other U.S. salaried personnel will have a 5 percent pay cut.
    According to a company filing with the U.S. Securities and Exchange Commission in July, Smith's base salary for the company's fiscal 2009 year was set at around $1.48 million.
    The company also announced the suspension of matching contributions to FedEx's 401(k) retirement plan for a minimum of one year as of February 1.
    FedEx said the cost-cutting measures would reduce expenses by $800 million by the end of its fiscal 2010 year.
    "Our financial performance is increasingly being challenged by some of the worst economic conditions in the company's 35-year operating history," Smith said in a statement.
    FedEx also gave a broad earnings outlook range for the second half of its fiscal 2009 year and said it would not provide an outlook for the third quarter because of "significant economic uncertainty."
    "It's tough, but it's a sign of the times," Al Meyers, portfolio manager of the AHA Diversified Equity Fund, which owns FedEx shares, said of the pay cuts. "The fact that executives including Fred Smith are taking pay cuts sends a message to employees that 'we're all in the same boat,' which is a positive."
    "As long as we have confidence in the management at FedEx and in the overall business model, we'll stick with them," he added.
    The Memphis, Tennessee-based company, which like United Parcel Service Inc (NYSE:UPS - News) is considered a bellwether of U.S. economic health, reported that net income for its fiscal second quarter ended November 30 rose to $493 million, or $1.58 per share.
    That compared with the $479 million, or $1.54 per share, the company reported a year earlier.
    FedEx said falling fuel prices had lifted profits, which offset lower package volumes due to global economic weakness.
    "I am very pleased with the results," said Dan Ortwerth, a research analyst at Edward Jones. "FedEx is getting better and better at managing its cost structure."
    Edward Jones has a "buy" rating for both FedEx and UPS.
    The company reported revenue for the quarter of $9.54 billion, compared with $9.45 billion a year earlier. Analysts expected $9.78 billion.
    FedEx gave a broad profit range of between 69 cents and $1.94 per share for the second half of its fiscal 2009 year and said that apart from economic uncertainty, the recently announced departure of DHL from the United States made it difficult to provide a forecast for the third quarter.
    "FedEx has been taking action for some time to offset the effects of a downturn," said Sandeep Kar, a transportation analyst at consulting company Frost & Sullivan. "They have done the right things to navigate them through these troubled waters."
    Deutsche Post AG (XETRA:DPWGN.DE - News) said in November that its DHL express unit would end U.S. domestic service on January 30 with the loss of 9,500 jobs, citing the U.S. slowdown and DHL's uphill struggle to compete against FedEx and UPS on their home turf.
    FedEx and UPS have seen package volumes hit by the slowing U.S. economy. UPS said in November the uncertain economic environment had made it too difficult to give its usual peak-season package volume forecast.
    FedEx shares were down 58 cents or 0.9 percent at $63.39 on Thursday afternoon on the New York Stock Exchange, after rising as much as 2 percent earlier in the day. (Editing by Steve Orlofsky and Matthew Lewis)
  2. SmithBarney

    SmithBarney Well-Known Member

    Don't know but I just went back to full time(had to go P/T when I transferred)
    and we all just got our "bonus's" not sure what they are called "frontline" is
    what its listed as on the paycheck, also just got paid a BZ. So far they are
    sticking to their guns on no layoffs, I wouldn't be surprised to see some
    management layoffs, we are a 2 mgr station, but have been with just one
    for 2 months, and recently got another, but the station ran just fine on one..

    If there are layoffs(and I would be at the top of the layoff list) I have a rough plan,
    and so should anyone in any job.
  3. The pay cuts do not affect the hourly workers,only salaried employees.As far as managers are concerned they are overpayed.The starting salary for a manager is roughly 15 per cent more than the top hourly pay for a courier.I have been told that a few managers in my station make over 80 thousand dollars a year.America is a great country where totally useless and incompetent people can make that much money for doing nothing.The worst part of the propaganda message is that the company contribution to our retirement plan is being cancelled for 2009.Fred Smith keeps on saying about cutting operating expenses.WAKE UP FRED get rid of Fedex Ground and save millions of dollars in managerial costs and operating expenses every year.Get rid of Fedex Home and save millions of dollars a year in operating expenses every year.Does this sound familiar Wall Street has been saying this for years.Corporate mismanagement of the Fedex corporation will ruin Fedex just as corporate mismanagement ruined other companies.
  4. MrFedEx

    MrFedEx Engorged Member

    Agreed. The big shots might have to buy a Bentley instead of a Bugatti Veyron this year...such sacrifices!! Or perhaps their caviar won't be flown in fresh on ice in a FedEx corporate jet for a few years. Once again, Smith has thrown the hourlies under the bus and saved many more millions than the symbolic cuts taken by the upper echelon. They'll still be incredibly wealthy and very well compensated, while we take it in the butt again. This time, however, he really stepped on his crank, because he's ticked-off his lower-level managers, who will be more reluctant to dish-out the usual propaganda than before. Go Teamsters!!
  5. over10.5

    over10.5 Member

    Im in AZ, was taling to a fedex driver today. He said that his hub laid off 14 drivers on tuesday. I sure hope these guys wise up and vote yes for union representation. Dont buy into fred smiths propaganda!!!
  6. upssalesguy

    upssalesguy UPS Defender

    why does fred even take a salary?

    COSMOS Member

    FedEx Freight drivers....?
  8. over10.5

    over10.5 Member

    Express drivers laid off.
  9. For the complete and accurate story about how much Fred Smith really makes a year go to Fedexwatch and read the TRUTH.1.4 million a year is nothing compared to what he actually rakes in with all the stock options he and the other top executives are allowed
  10. upssalesguy

    upssalesguy UPS Defender

    there are so many gullible people at that company. fred could never make another dime and 50 generations of smiths would never have to work.

    way to step it up for your company, fedrick
  11. COSMOS

    COSMOS Member

    Doubt that... To this point Express has yet to lay anyone off, especially this time of year.
  12. over10.5

    over10.5 Member

    Its true.
  13. Ricochet1

    Ricochet1 New Member

    Since I’m new here and don’t want to suffer the wrath of district management, I’ll only identify myself as an Express Courier. The recent pay cuts have seemed to have loosened the lips of a few people in managerial positions I know. It seems that cutting the pay of salaried employees along with their bonuses has a price after all.

    Firstly, a few months ago MrFedEx posted an informed statement regarding the eventual transfer of non-overnight volume to the Ground division for delivery. This was correctly assumed as only being possible with the installation of caster decking in the Ground Terminals. I was given information today confirming that contracts are in place to install caster decking at the remaining Ground terminals that don’t currently have caster decking. Cargo containers with non-overnight content will be transferred in the late afternoons from the receiving ramps; or directly from the hubs to the Ground terminals, for sorting and delivery by Ground division. This should be implemented fully by mid-2010.

    Secondly, the implementation of the ROADS system within the Express division is well underway. This system enables handlers with no knowledge of route boundaries, or even the knowledge to read an actual address, to sort and load delivery trucks in the AM. This is similar to the system that UPS already utilizes. Individuals will be trained to scan the address bar code and ASTRA, and apply a ROADS tag to each piece. Handlers will then pull the pieces from the belt, looking only at the ROADS label, and load them into the trucks. The system is sophisticated enough to even allow handlers to place the volume within “stop order”, eliminating the need for the courier to even place a van-scan upon each piece, and placing it in stop order. With the full implementation of this system (mid to late 2010), couriers will no longer be needed to participate in the AM sort. Larger stations will begin using the system next year, and once the “bugs” are worked out, it will be implemented in the smaller stations in early 2010.

    Thirdly, with Couriers no longer needed for the AM sort, and non overnight volume being transferred to Ground, there will no longer be a need to have full time Couriers. A gradual shift towards a part time delivery work force is going to be implemented. I was given the suggestion that the degradation of the benefits package is part of that strategy. There will be an AM and PM part time Courier force. Any full timers after mid 2010 would have to work an AM delivery route, then a PM pickup route if they are still around. Full timers still around at this date would be forced to take a 4x10 schedule, to prevent any overtime from being accrued. The goals are to reduce the labor costs through having lower compensated handlers doing the entire package handling, and a structuring of the workforce to virtually eliminate any overtime from needing to be granted.

    There was other information passed to me, such as the delaying of acquisition of new delivery truck purchases as much as possible, so that the reduced volumes that Express will deliver can be gauged, and smaller, more fuel efficient trucks can be purchased – supposedly starting in early 2010. The thrust is that things will be changing for the full time Courier force at FedEx starting next year. Two years from now, the work flow that we know now won’t exist. The high driver turn-over in Ground doesn’t seem to have affected their productivity, so the thought is that the same philosophy can be brought over to the Express side, and save on labor costs even more. The key to this is that for the quarter which just ended, FDX had a larger profit that it did for the same quarter a year ago. This isn’t being done out of necessity, it is being done out of a desire to restructure how the company delivers its service.

    The PSP philosophy has been inverted; it is now profit-service-people. The change in the “take-aways” is that the salaried employees that have given 60+ hours a week to FDX have been short changed this time. Loyalty is slipping fast. There doesn’t seem to be enough salaried managers that want to continue to either drink the FDX Kool-Aid, or to distribute it to their subordinates.
  14. SmithBarney

    SmithBarney Well-Known Member

    We have 600 plus Hybrid P700s trucks on the way after Christmas

    Its ok they said its the worst year ever, and while I agree the economy is in not so good shape, FedEx Express Forecasted 900k pieces Yesterday, and ended up with 1.33million
    breaking the record peak day.

    Its gonna be interesting...
  15. MrFedEx

    MrFedEx Engorged Member

    Great information. Sounds like we need to get ready and bend over AGAIN for another pounding. OR, we can go union and try and protect what little we've got left. You're correct that the 5% management paycut has opened some eyes and made them less willing to spread the FedEx fertilizer. Smith could give a crap about the employees who built his empire. He'll do whatever it takes to maximize his own fortune while we starve. I can only hope that more people wake-up and smell the feces coming down from MEM...before it's too late.
  16. COSMOS

    COSMOS Member

    From what I have heard, the idea is to move air cans through the FedEx Ground system and transfer them back to Express at the destination. There's been talk of part-timers taking over FedEx for at least the past decade but nothing ever materializes. Same thing for the idea of another buyout. Until someone can produce something on paper its all just rumor.
  17. DeputyDip

    DeputyDip Backwoods Hillbilly

    Just re-read Ricochet1's post. If even half of that is true, wow. Not sure how all that will work on Express rural routes.
  18. MrFedEx

    MrFedEx Engorged Member

    The excellent post by Ricochet1 lends a lot of credibility to the rumors. I've heard all sorts of stuff about Express managers holding secret meetings at Ground facilities and here comes the news that all Ground facilities have ball-mats or caster decking in order to accomodate air containers. Add-in all of the new Ground trailers that can only be used for air containers and it just all fits. I think the only thing really holding it back is the contractor issue over at Ground. Once that's resolved, Fred will be looking to get his money back and then save himself a bundle more.

    He's sold us down the river countless times before and he'd be happy to get rid of most of us if he could. What a guy. And remember, he lives the Purple Promise for us. Excuse me while I go throw-up....repeatedly.
  19. FedEx All the Way!

    FedEx All the Way! New Member

    Keep bending over, because Fred won't allow unionization. Wake up and smell the coffee - it just won't happen. I know there is no real big education level upstairs, but what does it take for you to understand that!
  20. Fred can not always get what he wants.Fedex lost the class action lawsuit in California for misclassification.When the M D L[MULTI DISTRICT LITIGATION] is settled in the mid section of the country and Fedex loses again for misclassification look for the end of Fedex Ground and Fedex Home brands.All of those so called owner operators will have to be treated as employees entitled to all the benefits that are due to them.The consensus of a majority of employees I have spoken to would welcome unionization with open arms.Employee morale is the lowest I have seen in 20 years and seems to get worse with every passing day.