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UPS can't compete because of high labor costs?
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<blockquote data-quote="clueless" data-source="post: 779533" data-attributes="member: 15572"><p><em>...use YOUR common sense...</em></p><p></p><p>Also try looking at the facts without preconceptions:</p><p></p><p>--to those who are pounding the table over 'record profits' please look at the SEC filings and note that for every dollar of revenue in the MRQ, UPS brought in, it made 7 cents in profit. For the last fiscal year, UPS made 5 cents in profit for every dollar it brought in. To preempt those of you who are about to scream 'last year the economy was in the tank', look at the prior 4 years of revenues vs profits:</p><p></p><p>2005 net income amounted to 9 cents per each dollar of revenue</p><p>2006 net income amounted to 9 cents per each dollar of revenue</p><p>2007 net income amounted to 1 cents per each dollar of revenue</p><p>2008 net income amounted to 4 cents per each dollar of revenue</p><p></p><p>Are these really all that extraordinary or exorbitant? How long would you work somewhere if your job-related expenses consumed 95 cents of every dollar of pay you received?</p><p></p><p>As far as labor costs being the culprit--again look at the facts--the trends and relationships are clear:</p><p></p><p>In the years net income as a % of revenues was at its highest in the last 5 years, the compensation & benefits line item represented on average 52% of revenues. For the lowest income year (2007), they amounted to 64% of revenues. As compensation/benefits decreased to 51%, net income rebounded to 6%. In the MRQ, where net income is back down to 5%, compensation/benefits are up to 53% revenues. IOW, the lost net income as a % of revenues occurred precisely when compensation/benefits were at their highest level. See the correlation?</p><p></p><p>To make it even clearer:</p><p></p><p>2005 Net income 9% Compensation/Benefits 53%</p><p>2006 Net income 9% Compensation/Benefits 51%</p><p><strong>2007 Net income 1% Compensation/Benefits 64%</strong></p><p>2008 Net income 6% Compensation/Benefits 51%</p><p>2009 Net income 5% Compensation/Benefits 57%</p><p>MRQ Net income 7% Compensation/Benefits 53%</p><p></p><p>As far as 'ability to compete'. Looking at its primary competition, FDX--its compensation/benefits line in consistently substantially lower than UPS' at no more than 40% of revenues over the past 5 years as well as the MRQ.</p><p></p><p>2006 39%</p><p>2007 39%</p><p>2008 37%</p><p>2009 39%</p><p>2010 40%</p><p>MRQ 40%</p><p></p><p> The 'other' trucking company--you know the one that's going bankrupt--has a more similar cost structure in terms of compensation/benefits to UPS than to FDX--YRCW's compensation/benefits line has been as follows over the past 5 years & MRQ:</p><p></p><p>2005 58%</p><p>2006 58%</p><p>2007 60%</p><p>2008 59%</p><p>2009 70%</p><p>MRQ 61%</p><p></p><p>Now, think clearly, logically, and rationally--which model do you think you'd want to more emulate if you were in charge of running the company? I should hope that answer if obvious.</p></blockquote><p></p>
[QUOTE="clueless, post: 779533, member: 15572"] [I]...use YOUR common sense...[/I] Also try looking at the facts without preconceptions: --to those who are pounding the table over 'record profits' please look at the SEC filings and note that for every dollar of revenue in the MRQ, UPS brought in, it made 7 cents in profit. For the last fiscal year, UPS made 5 cents in profit for every dollar it brought in. To preempt those of you who are about to scream 'last year the economy was in the tank', look at the prior 4 years of revenues vs profits: 2005 net income amounted to 9 cents per each dollar of revenue 2006 net income amounted to 9 cents per each dollar of revenue 2007 net income amounted to 1 cents per each dollar of revenue 2008 net income amounted to 4 cents per each dollar of revenue Are these really all that extraordinary or exorbitant? How long would you work somewhere if your job-related expenses consumed 95 cents of every dollar of pay you received? As far as labor costs being the culprit--again look at the facts--the trends and relationships are clear: In the years net income as a % of revenues was at its highest in the last 5 years, the compensation & benefits line item represented on average 52% of revenues. For the lowest income year (2007), they amounted to 64% of revenues. As compensation/benefits decreased to 51%, net income rebounded to 6%. In the MRQ, where net income is back down to 5%, compensation/benefits are up to 53% revenues. IOW, the lost net income as a % of revenues occurred precisely when compensation/benefits were at their highest level. See the correlation? To make it even clearer: 2005 Net income 9% Compensation/Benefits 53% 2006 Net income 9% Compensation/Benefits 51% [B]2007 Net income 1% Compensation/Benefits 64%[/B] 2008 Net income 6% Compensation/Benefits 51% 2009 Net income 5% Compensation/Benefits 57% MRQ Net income 7% Compensation/Benefits 53% As far as 'ability to compete'. Looking at its primary competition, FDX--its compensation/benefits line in consistently substantially lower than UPS' at no more than 40% of revenues over the past 5 years as well as the MRQ. 2006 39% 2007 39% 2008 37% 2009 39% 2010 40% MRQ 40% The 'other' trucking company--you know the one that's going bankrupt--has a more similar cost structure in terms of compensation/benefits to UPS than to FDX--YRCW's compensation/benefits line has been as follows over the past 5 years & MRQ: 2005 58% 2006 58% 2007 60% 2008 59% 2009 70% MRQ 61% Now, think clearly, logically, and rationally--which model do you think you'd want to more emulate if you were in charge of running the company? I should hope that answer if obvious. [/QUOTE]
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