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<blockquote data-quote="Ricochet1a" data-source="post: 867723" data-attributes="member: 22880"><p>There is no legal ramification for FedEx Corp...</p><p></p><p><em><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'">“Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment. Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenues of the billing segment.”</span></span></span></em></p><p><em><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'"></span></span></span></em></p><p><em><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'"></span></span></span></em></p><p><em><span style="font-size: 12px"><span style="color: #000000"></span></span></em><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'">In the FY 10 annual report to shareholders, FedEx freely admits to having segments doing "work" for each other. Does this get around the "spirit" of the RLA statute in regards to Express? Yes. Does it directly violate any law? No.</span></span></span></p><p><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'"></span></span></span></p><p><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'">Fred is very adept at having his cake and eating it too. He defines each FedEx segment to give him the most advantageous position in regards to labor law for the employees (or misclassified non-employees) to be classified under. Then he turns around and has the segments contract out work to each other, while merely doing an accounting exercise of moving money from one set of books to another - while not having to engage in open source bidding. </span></span></span></p><p><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'"></span></span></span></p><p><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'">One of my friends made a very astute observation in regards to FedEx's operating margin (mid-5% range).</span></span></span></p><p><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'"></span></span></span></p><p><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'">With all the special advantages that FedEx Corp has, it should be clearing a 15% operating margin, not a 5% margin. If it wasn't for all the special deals, FedEx Corporation couldn't turn a profit if it wanted to. The business model is completely DEPENDENT on Fred receiving his special deals. If the special deals were pulled, FedEx would have massively reorganize to remain profitable - namely dumping a lot of the cubicle dwellers in Memphis (and a few others scattered across the country). </span></span></span></p><p><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'"></span></span></span></p><p><span style="font-size: 12px"><span style="color: #000000"><span style="font-family: 'Calibri'">One of the things I'd be curious to see, is what is the ratio of cost of compensation of wage employees and their immediate management, to that of the cost of compensation of non-field management and the salaried support staffs. In military circles, this is referred to as the "tooth to tail ratio". I already know that FedEx has a rather large "tail" being pulled around by the tooth bearing portion, I'd just like to get some numbers to quantify that, then compare FedEx's to UPS's, ratio. </span></span></span></p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 867723, member: 22880"] There is no legal ramification for FedEx Corp... [I][SIZE=3][COLOR=#000000][FONT=Calibri]“Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment. Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenues of the billing segment.” [/FONT] [/COLOR][/SIZE][/I][SIZE=3][COLOR=#000000][FONT=Calibri]In the FY 10 annual report to shareholders, FedEx freely admits to having segments doing "work" for each other. Does this get around the "spirit" of the RLA statute in regards to Express? Yes. Does it directly violate any law? No. Fred is very adept at having his cake and eating it too. He defines each FedEx segment to give him the most advantageous position in regards to labor law for the employees (or misclassified non-employees) to be classified under. Then he turns around and has the segments contract out work to each other, while merely doing an accounting exercise of moving money from one set of books to another - while not having to engage in open source bidding. One of my friends made a very astute observation in regards to FedEx's operating margin (mid-5% range). With all the special advantages that FedEx Corp has, it should be clearing a 15% operating margin, not a 5% margin. If it wasn't for all the special deals, FedEx Corporation couldn't turn a profit if it wanted to. The business model is completely DEPENDENT on Fred receiving his special deals. If the special deals were pulled, FedEx would have massively reorganize to remain profitable - namely dumping a lot of the cubicle dwellers in Memphis (and a few others scattered across the country). One of the things I'd be curious to see, is what is the ratio of cost of compensation of wage employees and their immediate management, to that of the cost of compensation of non-field management and the salaried support staffs. In military circles, this is referred to as the "tooth to tail ratio". I already know that FedEx has a rather large "tail" being pulled around by the tooth bearing portion, I'd just like to get some numbers to quantify that, then compare FedEx's to UPS's, ratio. [/FONT][/COLOR][/SIZE] [/QUOTE]
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