FDX- Earnings and Cost Control Measures
12-18-2008, 11:18 AM
#11
Gets Weekends Off
Joined APC: Mar 2008
Posts: 609
Originally Posted by R1200RT
We need a stand alone pay rate for the 777! Even if it's a dollar then we can fix it later, but if we lump it in with the WB rates we are done. You are being very short sighted. As young as you are think 20 years from now. The cargo industry is supposed double in 20 years. We are going to be OK, no one is going to get furloughed.
I'll trade Fred checks any day. His pay is about 1/100th of his income. Put the glass of cool-aid down.
I'll trade Fred checks any day. His pay is about 1/100th of his income. Put the glass of cool-aid down.
12-18-2008, 11:34 AM
#12
Living the dream!
Joined APC: May 2006
Position: MD-11 Capt
Posts: 915
Originally Posted by BOYCAPTAIN
so old and yet so clueless!!!!..get a grip!....once again u have no idea what u r talking about..blab on old man!!!
Last edited by R1200RT; 12-18-2008 at 03:54 PM.
12-18-2008, 11:42 AM
#13
Gets Weekends Off
Joined APC: Aug 2007
Position: MD-11 FO
Posts: 608
Originally Posted by MD11Fr8Dog
It wasn't a beefed up 401k, beacuse a 401k is a defined contribution, and just another type of defined benefit (or promise to pay, like our A fund) called a cash balance plan. There is not actual cash in the employees name until he/she retires.
12-18-2008, 12:15 PM
#18
Gets Weekends Off
Joined APC: Aug 2007
Position: protecting my license until I get the next job.
Posts: 122
I feel bad for the exempt people, and well the rest of the employees. FedEx has a history of taking away pay incentives and benefits in tough times, but never giving them back when the booms comes. At least they may be smarter to send out "we're canceling BPP payouts" and following it the next day with "We're paying $100 Bajillion to put the FedEx name on a stadium".
And then my manager at the time read the company line that it's all part of marketing and advertising (because you're shipping selection is based on the stadium name).
I would say, given my past experience as a FedEx employee, that they will never see 401k matches come back. The employees who lose 5% will not see a snapback when the economy turns around (but I bet the execs get theirs back). It's not the People company it was even 15 years ago.
And then my manager at the time read the company line that it's all part of marketing and advertising (because you're shipping selection is based on the stadium name).
I would say, given my past experience as a FedEx employee, that they will never see 401k matches come back. The employees who lose 5% will not see a snapback when the economy turns around (but I bet the execs get theirs back). It's not the People company it was even 15 years ago.
12-18-2008, 12:29 PM
#19
Gets Weekends Off
Joined APC: Jun 2006
Posts: 2,227
A better article:
FedEx quarterly profit adds 3%, but '09 looks rough
Reduces salaries to save on costs; CEO gets a 20% pay cut
By Christopher Hinton, MarketWatch
NEW YORK (MarketWatch) -- FedEx Corp. said Thursday its fiscal second-quarter profit edged up nearly 3%, but challenging times in "the worst economic conditions" of the company's 35-year history spurred pay cuts and a hiring freeze.
For the recent quarter, the Memphis, Tenn., shipping giant said earnings rose to $493 million, or $1.58 a share, from $479 million, or $1.54 a share, in the year-ago period.
Revenue at the world's top overnight-delivery provider rose 1% to $9.54 billion.
Analysts polled by FactSet Research expected earnings of $1.58 a share on sales of $10.1 billion, on average.
After being up for most of the day, shares of FedEx were off 1.7% at last check to $62.92. The stock is off nearly 30% since mid-September when a crunch in the credit markets caused a steep deceleration in commercial and consumer spending.
Competitor UPS shares added a fraction to $52.91.
Helping the quarterly bottom line at FedEx was a steep decline in fuel costs
and the exit of German rival DHL from the U.S. market.
Shares of FedEx and its competitor UPS were climbing after FedEx reported a jump in shipping volumes and set pay cuts for some top executives.
Nonetheless, shipping volumes fell across the board, with overnight box shipments off 7% form a year ago and overnight envelope falling 10%. Total average daily package shipping dropped 7% to $3.3 million pounds.
Total average freight pounds fell 14% to 11.2 million.
"We frankly expect the difficult global economic environment will worsen in the second half of fiscal 2009," said Chief Financial Officer Alan Graf on a post-earnings call with analysts.
"Weak economic conditions in the U.S. have spread to Europe and Asia, and ongoing weak global economic factors are expected to further reduce demand for all of our transportation services," he said. "We don't believe we have reached the bottom of industrial production or consumer spending on a quarter-over-quarter basis at this point."
To cut costs, save cash and minimize job loss, the company instituted a hiring freeze and cut salaries for U.S. salaried exempt personnel by 5% effective Jan. 1. Further, FedEx senior executives will get a 7.5% to 10% reduction while Chief Executive Frederick Smith will receive a 20%.
That would equate to a $286,000 haircut for the CEO as his base salary is about $1.43 million a year, according to a recent proxy statement.
Smith said on the call that pay reductions, along with a freeze in hiring, elimination in bonuses and variable incentive pay, as well as a halt to company contributions for employee 401(k) plans, should save the company $200 million in fiscal 2009 and $600 million in 2010.
Furthermore, the company continues its program to ground older, more expensive aircraft, cutting back on flight and labor hours, and optimizing its route structure for greater efficiency, Smith said.
Along with a reduction in capital spending, FedEx projects it will save $1 billion for this fiscal year.
"The global economic downturn continues and we are in some degree
uncharted territory as uncertainty in the marketplace continues," said Fredrick Smith on a post-earnings call with analysts. "We cannot predict exactly how it will unfold."
FedEx CEO calls on Obama to change tax policy
During the call, CEO Smith said he believed the root cause of the current economic crisis was a tax policy that encouraged growth in the financial sector at the expense of manufacturing.
In the early '80s, the financial sector represented about 15% of U.S. industry profit, but that climbed to 32% after the federal government encouraged borrowing through the deduction of interest, according to Smith.
Meanwhile, the tax on capital spending was significant, he said.
"One of the things that we have advocated very strongly in addition to lowering the overall corporate tax rate is to expense capital, and that is a policy that President-elect Obama and his team could put in place," Smith said.
"I said in my comments we've reduced our capital from $3 billion to $2.4 billion," Smith added. "Well, if we can make capital investments and get the money back in the year they were made, it makes our workforce more productive."
He dismissed economic stimulus plans that encourage consumer spending, saying in tough economic times people will just put it towards reducing their debt.
FedEx quarterly profit adds 3%, but '09 looks rough
Reduces salaries to save on costs; CEO gets a 20% pay cut
By Christopher Hinton, MarketWatch
NEW YORK (MarketWatch) -- FedEx Corp. said Thursday its fiscal second-quarter profit edged up nearly 3%, but challenging times in "the worst economic conditions" of the company's 35-year history spurred pay cuts and a hiring freeze.
For the recent quarter, the Memphis, Tenn., shipping giant said earnings rose to $493 million, or $1.58 a share, from $479 million, or $1.54 a share, in the year-ago period.
Revenue at the world's top overnight-delivery provider rose 1% to $9.54 billion.
Analysts polled by FactSet Research expected earnings of $1.58 a share on sales of $10.1 billion, on average.
After being up for most of the day, shares of FedEx were off 1.7% at last check to $62.92. The stock is off nearly 30% since mid-September when a crunch in the credit markets caused a steep deceleration in commercial and consumer spending.
Competitor UPS shares added a fraction to $52.91.
Helping the quarterly bottom line at FedEx was a steep decline in fuel costs
and the exit of German rival DHL from the U.S. market.
Shares of FedEx and its competitor UPS were climbing after FedEx reported a jump in shipping volumes and set pay cuts for some top executives.
Nonetheless, shipping volumes fell across the board, with overnight box shipments off 7% form a year ago and overnight envelope falling 10%. Total average daily package shipping dropped 7% to $3.3 million pounds.
Total average freight pounds fell 14% to 11.2 million.
"We frankly expect the difficult global economic environment will worsen in the second half of fiscal 2009," said Chief Financial Officer Alan Graf on a post-earnings call with analysts.
"Weak economic conditions in the U.S. have spread to Europe and Asia, and ongoing weak global economic factors are expected to further reduce demand for all of our transportation services," he said. "We don't believe we have reached the bottom of industrial production or consumer spending on a quarter-over-quarter basis at this point."
To cut costs, save cash and minimize job loss, the company instituted a hiring freeze and cut salaries for U.S. salaried exempt personnel by 5% effective Jan. 1. Further, FedEx senior executives will get a 7.5% to 10% reduction while Chief Executive Frederick Smith will receive a 20%.
That would equate to a $286,000 haircut for the CEO as his base salary is about $1.43 million a year, according to a recent proxy statement.
Smith said on the call that pay reductions, along with a freeze in hiring, elimination in bonuses and variable incentive pay, as well as a halt to company contributions for employee 401(k) plans, should save the company $200 million in fiscal 2009 and $600 million in 2010.
Furthermore, the company continues its program to ground older, more expensive aircraft, cutting back on flight and labor hours, and optimizing its route structure for greater efficiency, Smith said.
Along with a reduction in capital spending, FedEx projects it will save $1 billion for this fiscal year.
"The global economic downturn continues and we are in some degree
uncharted territory as uncertainty in the marketplace continues," said Fredrick Smith on a post-earnings call with analysts. "We cannot predict exactly how it will unfold."
FedEx CEO calls on Obama to change tax policy
During the call, CEO Smith said he believed the root cause of the current economic crisis was a tax policy that encouraged growth in the financial sector at the expense of manufacturing.
In the early '80s, the financial sector represented about 15% of U.S. industry profit, but that climbed to 32% after the federal government encouraged borrowing through the deduction of interest, according to Smith.
Meanwhile, the tax on capital spending was significant, he said.
"One of the things that we have advocated very strongly in addition to lowering the overall corporate tax rate is to expense capital, and that is a policy that President-elect Obama and his team could put in place," Smith said.
"I said in my comments we've reduced our capital from $3 billion to $2.4 billion," Smith added. "Well, if we can make capital investments and get the money back in the year they were made, it makes our workforce more productive."
He dismissed economic stimulus plans that encourage consumer spending, saying in tough economic times people will just put it towards reducing their debt.
12-18-2008, 01:06 PM
#20
...Whatever It Is!
Joined APC: Jul 2006
Posts: 4,680
Originally Posted by TheBaron
I think you are mistaken on this one. I was stuck in the hub one day after the change came down and they had a special on the company "kool aid" channel about it. It sounded EXACTLY like a 401-k and they even noted that when you left the company (retired, quit, or terminated) you took your money with you. They even explained about rolling it over to a new employers plan.
Cash Balance Plan
