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Old 10-24-2005, 09:55 PM   #1  
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Default UPS CEO q & a

Q: Hurricane Katrina took the country by surprise. What lessons did a logistics company like yours learn from a major hurricane?

A: We couldn't find all the people for the longest time. We learned we need to establish phone lines (for employees) to "call this number" if anything ever happens. We hadn't set that up before. Fortunately, the buildings were closed, so there wasn't too much work to do. We did want to find the people so that we knew where they were, that they were safe, if they had any needs that we could help them with.

Q: Fuel is a huge expense for a company like yours. How do hurricanes and rising gas prices affect business?

A: Rising fuel prices is a big part of our budget, and we have to keep finding ways to keep our fuel in line and minimize the miles. We have an integrated network, so it allows us to use ground and air the best way we can. We have our air deliveries, our ground deliveries and our residential deliveries all done by the same drivers. We're able to -- I think better than any of the other integrated carriers -- find ways to minimize those miles and burn the least amount of fuel. We pass a lot of that on to our customers.

On the big picture, rising fuel prices are not good. We do better when the economy does better. If people have less disposable income, then companies have less disposable income. The economy doesn't move as well. On the other hand, you know, when they don't want to drive as much, they may go to the Internet and we may move more for them. It may bode well for an e-commerce Christmas. We'll just wait and see what happens. So there is a little bit of mitigation. But, better economies and lower fuel prices are better for our business.

Q: Your company has diversified into many services. Can you describe some that you offer?

A: In our supply-chain business, we contract with companies that ask us to run their distribution for them. They ask us to manage their warehouses, take their orders, pack the shipments, move the shipments. They ask us to restock. They ask us to repair. For instance, Toshiba is probably the best example I can give you. If your Toshiba laptop breaks they tell you to take it to a UPS Store. The UPS Store will pack that package, it will be sent to Louisville. We will repair it with our technicians in Louisville and ship it back out. We're actually repairing computers. It really is thinking about solutions that customers need.

Q: Your company uniform is a walking advertisement for Big Brown. I assume that's not an accidental look but a cultivated image. Is the uniform sacrosanct?

A: We've changed parts of the uniform. We put shorts in -- that was the biggest change we did, probably 10 years ago. It was welcomed. In fact, there are parts of the country where they wear shorts year-round. We've changed the shirt design. We've changed the logo. We've had different coats and hats over the years. The color's been brown since probably 1920. It was Pullman brown. We thought it was professional. It kept clean better and didn't show dirt. It's our favorite color.

Q: It's become increasingly trendy to talk about "corporate culture." UPS corporate policy prohibits employees from drinking coffee and eating a sandwich at their desk. Your employees wear identical uniforms. Is corporate culture a euphemism for enforced conformity?

A: We like to think we're all the same. I came down here on a commercial jet. I sat in 12D, by the way. We all treat ourselves the same. If you are going to have coffee, you go downstairs and have coffee with people. It's a good chance to walk down to the cafeteria, talk to people and be together. We don't eat at our desk. We tell our drivers not to drink coffee in the trucks.

We have a rich culture that's pretty egalitarian. We answer our own phones. We don't have private dining rooms. We don't have drivers that take us to and from places. We call each other by first names. If you were to go to Atlanta and walk around with me, you'd be surprised. I go downstairs (to the cafeteria), I stand in line like everybody else. People come up to me and say, "Mike, what are you thinking about these days?"

Q: In your 33 years with UPS, you've been assigned to Germany and seven states. Is that the career ladder of multinational corporations -- hopscotching across the globe without sinking roots? I would think some business and MBA students find it worrisome to think they're expected to demonstrate their commitment to the corporation by living a nomadic lifestyle.

A: They ask about movement, family movement. I see those kinds of things happening in the next generation. And I answer: Not everyone moves. But a lot of that is also for increasing peoples' backgrounds. Those folks that do move generally get to see a lot of different things. A lot of these kids, as they grew up, they moved a lot themselves. So one may think one thing, but (for) another, that's not so bad.

They ask about how we spread the culture throughout the world. I've told them how powerful I think our culture is. It really has made us a unique company.

It really does something that's worthwhile when you deliver a needed item, medicine or a device -- or even a book that you want. Just doing something worthwhile helps spread that same culture.
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Old 10-25-2005, 09:17 AM   #2  
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Impressive interview. Where did the interview come from? Just wondering what the bais may be. Seems like a great company to work for. Its seems others on the board have other opinions.

Thanks
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