New form for the RedLetter
 

So, is this latest production just another form of the infamous "red letter" from some years ago?

Remember, the company is NOT pleased with a couple of things...the result of the LOA bid and the unity and resolve displayed by a cadre of N/B instructors.

Could this be the power-play to get the Union to talk turkey on several issues?

It's my guess that it is. By threatening BLG rollbacks, bid cancellations, and potential furloughs the company is in effect putting the squeeze on the Union since by virtue of this news, we are putting the squeeze on our leadership.

Remember, we ONLY made nearly a half a BILLION profit this quarter! Asia is booming and driving all of our growth. I think they are bluffing. Who blinks first is yet to be determined.

Half a BILLION profit and this is how the pilot group gets treated?

Reading that FCIF reminded me of getting yelled at as a kid..."I'm going to take away this, the summer trip is CANX, going to have to take away that...blah, blah, blah!"

What bothers me is that WE are the most powerful and most important group in FDX...when will we start acting like it?

Let's see if ALPA buckles again.

I actually did think of the "RED LETTERS" as I read the FCIF. I had a different read on it though. I thought PC was rather complimentary of the pilot's contribution to the company. He made a point of saying he has NO PLANS TO FURLOUGH (at least at this point). I'm a bit concerned about the bad precedent of canceling bid awards but, it appears the contract permits it.

All-in-all, I saw the FCIF as simply stating facts (weak economy, over manned, 3-man to 2-man airplane transition, age 65, etc.).

Flight management is usually hesitant to put that sort of stuff in writing (I suspect for liability reasons?). I appreciated the straight forward professional tone of the FCIF.

Mark

FedEx is going to have to cut everything in order to stay in the green. The lawsuits from the independent drivers are really going to cut into the bottom line and will put a financial burden on the company like it has never seen.

First:

CHICAGO (Reuters) - FedEx Corp (FDX.N: Quote, Profile, Research) shares dipped more than 2 percent on Monday following news late Friday that U.S. tax authorities had found the company owed more than $319 million in taxes and penalties for 2002 related to its independent contractor model at FedEx Ground.
Estimates vary for how much FedEx may eventually asked to pay the U.S. Internal Revenue Service -- which is now reviewing FedEx's results for calendar years 2004 to 2006 -- but Credit Suisse analyst Jason Seidl wrote in a research note to clients entitled "FedEx Gets Coal in its Stocking" that the company "could potentially owe nearly $1.5 billion in taxes and expenses when all audits are completed."

This is just the taxes that the company will owe imediantly, after this initial payment they will have a tax liability of 350-450 million a year.

Second:

The drivers are challenging FedEx to change its classification of their positions -- they're treated as independent contractors -- so they can obtain overtime wages, reimbursements and benefits. Currently, FedEx requires contracted drivers to purchase or lease their trucks and pay for all operating expenses, including liability insurance, fuel and maintenance.
The lawsuits also seek reimbursement of business wages, deductions and damages as a result of FedEx's alleged "misrepresentation and unfair business practices," according to documents from lawyers representing the drivers. The suits claim FedEx takes illegal deductions from wages and fails to notify drivers of medical-leave rights.
The Massachusetts attorney general cited FedEx Ground for intentionally misclassifying 13 pickup and delivery drivers as independent contractors rather than employees and intends to fine the company $190,000 in penalties.

Five years ago the number was put at about 1.3 Billion a year to make them all employees annually. Fred is going to fight this battle very hard but has lost in every court case and the end is near. If he losses the class action lawsuit being filed in Indiana then things are going to get very difficult at FedEx. Sorry.

Sure so, let's cut pilot pay and mention furlough...that'll fix it.

Again, we are the most important and most powerful part of this company, when are we going to start acting like it?

I hate to be so negative Rat, but I would guess never.

So, let's see...There are about 15,000 "independent contractor" drivers. And you say, five years ago it would cost $1.3 billion a year to make these 15,000, employees?

My calculator says that would be about $87,000 each, annually, in additional costs.

That doesn't sound right.

I believe this includes a tax hit of over 350 million a year. FedEx would have to buy and maintain the trucks, health, retirement, and better wages. Many of the drivers make very little for the work that is done and want better wages. This is the reasoning behind the lawsuit. The number of 1.3 Billion is not my number and the article is to old on yahoo to pull up. This was the main reason that I chose to fly for UPS vs FedEx. I will post the article if I can locate it.

Here is all that I could find with some solid numbers.

While there are some contractors with multiple routes that make a profit, the majority of the contractors struggle to make ends meet. Every year, FedEx increases per package and per stop settlement payments but reduces the core zone settlement payment in essence making it impossible for drivers to make more money. In addition, FedEx mandates that drivers bear all expenses and buy their truck. The average operating expenses and benefits are approximately $15,000 to $30,000 annually. Drivers take home pay is significantly less than their gross earnings. Even FedEx’s recruiting materials show that the average contractor makes between $40,000-50,000 after expenses are deducted.

$30,000 for expenses
$30,000 to bring up wages to industry standards
Plus retirement
Taxes of 350 million yearly

Again these are not my numbers, so take it for what its worth.

Going soft on us?:confused:
Just ribbing ya'! I actually read it exactly the same way.

Our union has the opportunity to make some negotiating "hay" with this, though.

I thought it was "just the facts, ma'am" too.

Oddly enough, this isn't even the end of it. As I said (to much scolding of the apparent kool-aid drinkers) when Fred learns to drive long haul trucks and use rail as efficiently as UPS it will have as great or greater impact than age 65. UPS has always paid far better, with far better benefits to it's drivers. Now that the playing field may be getting leveled the landscape may change yet more. As union members you'd think the Fed Ex pilots would support improving working conditions and more union membership. Keep in mind that if they do all unionize they might well consider supporting you guys next contract instead of Fred threatening to shut the whole thing down. Face facts fellas, you're past V1 regards one big happy non-union family thing. How you adapt now will determine your place in the brave new world. As Jack Nicholson would say, "...act accordingly..."

Meant to write a reply to vagabonds similar post a couple of days ago. What should we do; walk out of the next hub turn and stop traffic on I 55 while singing the internationale. If they want a union good on them. If they want help great. I don't feel threatened by Fedex Ground or Fedex Kinkos. Now those sneeky ba$tards at Fedex LTL is a different story. :)

PS
I think we will be alright unless Fred reads your post and discovers what he is missing!

Grape Koolaid is best

I agree. I don't think it is a bluff it is just business. They are not making it up that we have over 150 very senior guys coming back and a majority of the crew force who will now work until 65. Don't have to be a rocket scientist to figure out that this equates to fewer new hires and fewer upgrades.

Hell has frozen over. I actually agree with you.

Folks, this DOESN'T MAKE FINANCIAL SENSE! Consider this:

1. We are FAT, MOSTLY in the S/O seats (727)/(DC-10)
2. Current rates are $123.91 for the 72 or $140.90 for the 10
3. If the company opens those 200 seats up to the over 60 crowd, they all go to $231.65/hr. (at least a $90 pay increase per hour!)
4. The folks they bump out are all around $220/hr ($12/hr difference)
5. Those folks will most likely populate narrowbody Captain spots at $195/hr. ($25/hr paycut - BUT $55 MORE PER HOUR THAN THEY ARE PAYING THE OVER 60 CROWD TO STAY PUT.

To me it makes NO SENSE to do this. What they SHOULD do is NOT open a bid for then next 2 year till the 777 shows up. Then they purge a bunch of the 200 or so that will be over 63 that are in the back now. Negotiate a side-letter that disallows the migration from 60yrs old to a S/O seat where a vacancy doesn't exist (can't believe they have allowed this to happen this long as it is).

In the end, the company would save MILLIONS on pay and training in just the next two years.

...or just send them out on an ice flow. Isn't that what the inuit do? (Just kidding JJ....)

OK, now I'm really confused( yeah, I know, former Marine, what do you expect) What 200 seats are you talking about here. And how do they bump these guys back if it is an excess bid that generates all this movement. And if they do bump them where do the bumpees go. And do you mean 65 year old guys to the back seat?

200 seats seems to be the number that has been floating around......not exact obviously. If you excess a S/O that can hold MD-11 Captain, correct me if I am wrong, he displaces the junior MD-11 Captain if the company deems that junior MD Cpt as a newly generated excess. The "bumpees" go where they can hold a seat, thus bumping out the junior folks and on and on till the break of dawn.......as the song goes.

Honestly, we are all speculating here anyway. We'll find out soon enough I guess.

[quote=Sideshow Bob;288660]Oddly enough, this isn't even the end of it. As I said (to much scolding of the apparent kool-aid drinkers) when Fred learns to drive long haul trucks and use rail as efficiently as UPS it will have as great or greater impact than age 65. quote]

Hard to drive a truck from China

bumping junior guys?
 

Can you imagine how many training cycles that would create... right now there will be no 11 Capt seats opening on any bid that comes out... so no one is getting bumped... in HKG and CDG maybe a few on the 757 and 300.. that leaves the right seat for the ND's to go to at the FDA's, it's a foot back in the front seat.. and they dont' have to plumb or Horror of Horrors... retire. :eek:

If they excess off the 727 and -10, the "should haves" will be able to take over whatever seat their seniority will hold. Yes, some will be filling the already fat Capt seats. The answer to me is don't excess yet and let them sit in the S/O seat for $100 less an hour. If we're fat in all the seats, no sense in paying them more to do it!

[QUOTE=fub141;289050]Jeeeze you guys are dense...

But he WILL learn to drive trucks on two day products that NOW fly on airframes DOMESTICALLY. UPS didn't used to either, but optimized their trucking network which dwarfs and outperforms yours...for now. The cost to move by truck and rail is a fraction of air, but you already knew that. And Fred has to make up his IRS losses somehow. Wakeup call sport, Fred is more interested in making money than keeping you airborne. As for China, have a look at your "scope" clause...

[quote=Sideshow Bob;289098]Care to elaborate?

Does that suggestion fit the logic behind adding the wording in the HR to allow them to return in the first place? Did it not, according to the author of the wording, Mr. DW, deal with their untouchable and almighty seniority rights?

And now he, along with our local union, would be for abrogating those rights in such a manner? Even with overwhelming membership support?

PC in his gloomy letter announced there will be a posting in the next week. I suspect this will be the opportunity for the age 60 guys to get back in the saddle. No it does not make sense you are right. What does anymore?

It will be for CDG and HKG to see if anyone under the age of 60 reconsiders.

That's my prediction too. Open up a bid with the only vacancies to the front seats being CDG adn HKG. How many guys will jump on that to get back up front? Will they incur a training freeze for the bid that follows or will they just bid to the new vacancies? Big question for a lot of us is when will there be another 11 Capt vacancy?

They won't incur a training freeze, because they will be upgrading from S/O to F/O or CAP.

Seems to me I remember a 2 year minimum if you bid the FDA.

That time of the month? Try Midol...

Not that ALPA at Fed Ex would ever get blindsided, but we sure did by a provision in the '97 Teamsters contract allowing "heavy crewing" by the long haul drivers, which took away a LOT of daytime flying. Not that genius' like you would ever need to learn from the experiences of others, but perhaps somebody might be able to at least consider steps to protect flying as much as possible, especially considering it appears you might be "talking" with the company soon regarding give and take...unless you just want to give that is.

Or not...

Now back to your regularly scheduled denial-fest.

[QUOTE=Toccata;289177]Does your CBA guarantee that all new international flying (ie: intra-China) will be done by those on your list, and if so, how will you enforce it? Since you're banking on China so much it might be of concern.

Our LOA clearly states that "all flying in China will be dun by bubbas"!!!!

Oh yeah...except for THAT...:D

Forgot about the two drink minimum...

Into and out of China might be ours, but the stuff within China is done by an airline that FDX owns a major share of, with pilots not on the FDX seniority list. At least I think that is correct.

Can't be. That LOA improved our scope, remember?

http://findarticles.com/p/articles/m...5/ai_n19271351

http://www.airlinepilotforums.com/showthread.php?t=2311

Doesn't that only apply to paying back seed money and storage payments?

Sarcasm, brother. Sarcasm. Good links, though.

[QUOTE=Sideshow Bob;289652]Sideshow? Like a carnival geek?

I, for one, will not be happy until we not only locked up all international flying...But, all intergalactic flying as well, in our CBA.

And, I think that we should be sure that if the company furloughs...That our furloughees are offered positions, driving the FedEx ground trucks.

That should be our highest priority in the current talks with management.

How's that Bob? Will you go away, now?

Or, just start your own thread with all of your warnings for us.