FDX-Are we really doomed?
 

IMO-The company wants to keep the ledger black.....and do something to keep the shareholders happy amidst all of the negative news the media is reporting.

But, how doomed can we really be given the companys recent increase in the dividend (a 10% increase just this past June)

Think of what that means, there are 311M shares outstanding getting 44 cents per year, so, freezing the dividend for a year would save 150 M.

FedEx has 1.54B cash on hand. How many years of BLG buyup would it take just to get to a mere 1B cash on hand?
Assuming the buyup is costing FedEx 1M a month (read it in another post, so, don't know how valid that number is) it would take 45 years of buyup to drop the cash down to 1B.

FedEx owns lots of stuff, thus, we aren't leveraged in the same way the majors are. Our debt to equity is .13 Delta's is 4.24 Or, if you'd prefer, UPS is .987

What that really means is that FedEx is very financially healthy. Sky is not falling, it's certainly dropping, but FedEx has many advantages available to navigate and survive during these troubled times.

It is my opinion that FedEx wants to keep as much cash (and equity) on hand as possible to look for opportunities to buy assets as cheap as possible and expand as opportunities present themselves.

It is managements job to try and get us to work for free. It is the unions job to max out the pay for the least work possible.

I will only be worried about a furlough coming if the company announces it is closing the HKG domicile, which I don't think will happen. The economy will turn around, eventually, and I think the company wants to be positioned to take advantage of the opportunities to come.
SIBA to HKG is not economically supportable for an entire domicile. Too much lost productivity and a travel bank in the 20k range each month is greater than a Capts yearly salary--shoot, almost up to 380 rates

You're more optimistic than I am. Given the email from DW, it appears the company is going to cut our BLG. My prediction is that they will provide the union with "proprietary, confidential information" that will not be shared with the crewforce. DW and the NC will then rubberstamp the company's plan to cut our pay. The MEC will then rubberstamp DW's decision. Denials and explanations will follow, all of which will fall short of making any kind of sense. There will be no snap-back clause and we'll have a permanent reduction in our pay, making negotiations for 2010 pointless. Once again, DW is going to take us down a road that most of us don't want to go down. And he'll collect his 90+ CHs a month while he's doing it.

Kronan, great post. DW is not an evil guy, just very opinionated. If you think his opinion is that he should sell us out, you're mistaken. I have a hard time finding a decision he's made lately that I would support, except for the 'no furlough, share the pain' one... And that's a doozey.

Quote:

---

7. Ratification of Agreements
Collective Bargaining Agreements resulting from negotiations undertaken pursuant to the Duration Clause of the CBA in accordance with Section 6 of the Railway Labor Act, or Letters of Agreement (LOA) amending the CBA which have been approved by the FDX MEC, shall be subject to membership ratification.

---

That's highly unlikely(LOA) Deuce, I doubt ALPA legal would even let Prater sign it, let alone DW.

I do not think the contract can be changed in this manner by the MEC and DW alone. Do not these types of changes require a LOA? I know the ones who voted for LOA2 "not Me" gave the MEC Chairman change authority for the FDA's but not the entire contract.

Yes, you're correct. I went off a little half-cocked after getting DW's message. The follow up we received today from the MEC was definitely more encouraging. Not the situation, but I feel better about our leadership's commitment to protecting our interests.

I think management is between a rock and a hard place. Do they want to do something, sure, is it likely, I think not.

First, I think FDX does not want the bad press of a furlough. We are still making tons of money. We are trying to get DHL customers. We won't unless UPS blinks first. Imagine the ad campaign launched on us by UPS to get customers if we annouce furlough.

Second, the BLG reduction down to 48/60 is not possible thanks to INTL lines.

Third, they can't furlough 'hundreds'...who will fly the 727? They would need a displacement bid with the furlough. You want some overmanning in order to be poised for opportunities that may arise in the future. You don't want pilot's on the street to be re-trained. You want them ready to go if the need arises.

This section of the contract is poorly written because people thought it would never come to this. They can't just lower the BLG because they want to, they have to in order to prevent or delay a furlough. Which means they have to ANNOUNCE a furlough, which again I think they are afraid to do. That, I think is the kicker.

I think the only way the company can proceed is (1) to get an LOA removing/altering/displacing the furlough langauge AND allowing them to reduce BLG by seat/aircraft (in order to save INTL lines). (2) Ask for a minor BLG reduction across the crew force (not mentioning furlough) in kinda a spread the pain/save the company/we're all in this together gesture OR (3) reduce BLGs (again without f word mention) on some lines/acft.

We're still making money people.

magic rat,
Excellent!. What I underlined is exactly what I have said to fellow UPS drivers. The marketing folks are salivating at both camps for the other to even breath the word 'furlough'. A boon to the other. I do love our overnight/logistics detente. <g> One reason I think think ALPA/IPA could actually strategically coordinate some leverage with each other during our next CBA negotiations.
Good for all of us.

I think both work groups (UPS & FedEx) would do well to listen to what Salty Dog and Magic Rat are saying.

One of the symptoms of an approaching nervous breakdown is the belief that one's work is terribly important.

Bertrand Russell (1872 - 1970),

Everyone needs to read PC's FCIF!