House Passes FAA Reathorization Bill - Fedex
 

House OKs safety plan for overseas aircraft work - Yahoo! Finance

House OKs safety plan for overseas aircraft work
House approves safety plan for more US inspections of foreign aircraft repair stations
Joan Lowy, Associated Press Writer
On Thursday May 21, 2009, 6:26 pm EDT

WASHINGTON (AP) -- U.S. inspectors would conduct more checks of overseas aircraft repair stations under a House bill approved Thursday that seeks to address safety concerns as major airlines send maintenance work overseas.

The European Commission has threatened to pull out of an aviation safety deal over that requirement. A U.S.-European Union agreement says each will have comparable safety requirements and inspection systems.

The legislation also authorizes $13.4 billion to accelerate the U.S. transition from a radar-based air traffic control system to one based on Global Positioning System technology.

The bill, approved by a vote of 277 to 136, requires the Federal Aviation Administration to increase its overseas inspections from once a year to twice a year, and foreign workers would have to submit to the same drug and alcohol testing and criminal background checks that apply to U.S. workers.

A report last year by the Transportation Department's internal watchdog said nine big U.S. airlines are farming out aircraft maintenance at twice the rate of four years earlier and now hire outside contractors for more than 70 percent of major work. While most of the outsourced work is still done in the U.S., often at nonunion repair shops, more than one-quarter of the repairs are done overseas.

The European Commission has threatened to withdraw from the pending aviation safety deal if the provision on overseas repair station becomes law.

Republican lawmakers called the provision a "job killer," predicting European airlines will stop sending their aircraft to repair stations in the United States.

"Our interest here is putting people to work and making this system safe, not doing away with jobs," said Rep. Rep. John Mica, R-Fla., who waved a list he said contained of 11,000 aircraft repair jobs in the U.S. that would be lost.

Rep. James Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee, said the Europeans are "crying wolf."

"I wouldn't want to have to come back on this floor at some future date and have to respond to an air tragedy because an aircraft wasn't properly inspected in a foreign repair station that wasn't properly crewed or supervised by U.S. personnel," Oberstar said.

Another provision of the bill would make it easier for unions to organize FedEx truck drivers and other non-aviation employees.

Since its founding in 1971, FedEx Corp. of Memphis, Tenn., has fallen under the Railway Labor Act, which requires long mediation before employees can take work actions and bars localized unions. The bill's provision placing some FedEx workers under the less restrictive National Labor Relations Act would benefit the International Brotherhood of Teamsters, which has sought to represent FedEx drivers, and rival package delivery giant United Parcel Service of Atlanta, whose drivers are already Teamsters.

FedEx has vowed to cancel a $7 billion order for 30 Boeing 777 freighters if the provision is enacted; Teamsters officials have accused the company of trying to blackmail Congress.

The provision "threatens FedEx's ability to provide competitively priced shipping options and ready access to global markets," FedEx spokesman Maury Lane said.
The bill, which would authorize $70 billion for the FAA through September 2012, also would:

--Require the agency to hire more safety inspectors.

--Increase taxes on fuel used by corporate and private aircraft, raising an additional $600 million over 10 years beginning in 2010.

--Create an independent office to investigate whistle-blower complaints.

--Increase money available to subsidize air service to rural communities from $127 million to $200 million annually.

--Require a study on pilot fatigue.

--Require a study on airline pilot training and certification.

--Require airlines and airports to develop contingency plans for how they will handle the passengers whose flights have been delayed for hours on tarmacs. Consumer advocates had sought a three-hour limit on how long airplanes can sit on runways before they have to return to a gate.

House Transportation and Infrastructure Committee: Transportation and Infrastructure Committee

Federal Aviation Administration: FAA: Home

Seems to me that FedEx's Maury Lane just admitted that they can't compete with UPS on a level playing field. If I was Fred Smith or a FedEx investor, I'm not sure I'd want my company spokesman making that type of comment. The Street will surely take notice.

What "level playing field?" UPS has something like 100 trucks to every 1 from FedEx!

The comment from Mr. Lane was in reference to not being able to compete with a unionized ground workforce, something that UPS seems to deal with just fine.

What's the over/under on this thread going straight into the sh1tter?

AerisArmis,
Probably high, in any case. UPS is a trucking company that bought airplanes. Said trucks are operated by all union drivers.
FedEx is an airline that is now strengthening its trucks. The two companies are the same, just arriving at the same point differently. Now FedEx has to contend with the possibility of a unionized driver force. As an airline pilot, it bears watching because the eventual big force of 24 hour team drivers take away alot of airplane volume. It was painful as we went through the transition (4 days sorts down from 5, etc). As a fellow industry bub, I only wish well for both my Brown team and my Purple friends. We are really complimentary and the competition helps us both thrive in the marketplace.

Truth be told, Fred's success has came at UPS's expense despite UPS being a huge international company. If I were a UPS investor, I'd be worried about that type of competitor.

Again you are confusing Fedex Ground/Freight/Express. They are separate companies with separate sales, sorts, and delivery employees. If this happens Fred will just have to change his business model and let a lot of those separate employees go. Typical lefties, greater good is defined by what boost union employment not overall employment. Whatever it takes to keep those PAC contribution rolling.

FDXLAG,
When did I confuse them before??? <g>
I have never confused them. We are integrated logistics companies. UPS oversees an empire of various subsidiaries,
UPS Supply Chain Solutions
UPS Capital
UPS Airlines
UPS Express Critical
UPS Freight
UPS Logistics
UPS Mail Innovations
UPS Professional Solutions
Each with own sales staff, employees, facilities, sorts, and delivery employees where applicable.
When we fly into a gateway, we don't work for the folks there, we are the air subsidiary, different managers, etc.
UPS managed to use ground networks to cut airline costs, less pilots, etc, increase services etc. UPS bought Overnite in 2005 to compete with your seperate companies LTL business, etc. That was the subsidiary (UPS Freight) to compete with Fred's purchase of Viking and then American Freightways.
Here is how Fred intended those purchases:
"FedEx Corp. announced today it would re-brand its two LTL operating companies, American Freightways (AF) and Viking Freight, as FedEx Freight. They will continue to maintain separate operations to optimize service in their respective geographic markets, but will work closely with other FedEx companies.
"This move will boost our sales and marketing capabilities in the growing LTL market," said Frederick W. Smith, FedEx Corp. president & CEO. "While AF and Viking have excellent reputations in their market segments, they will now join their sister FedEx companies to compete collectively with the transportation industry's most diverse portfolio of shipping services."

Exactly what UPS does.

All was pointing out was Fred's quote from above. American Freightways and Viking Freight become FedEx Freight
if you want to read the rest.

Fred will combine efficiencies of all these companies he controls. Exactly what UPS does.
and if UPS does something, FedEx matches, FedEx does something, UPS matches.
Our management teams aren't dumb, They will continue to minimize costs in our airlines using their other delivery modes when able. When your LTL folks become team drivers, Fred will most certainly fill trucks with air volume like UPS. Stand by my original post.

double post.. deleted

You mean long hair dude is lying?
 

So if I ship something with UPS ground it come in a ups ground truck? What color brown is that truck?

If this happens the business model will change and a lot of employees will be looking for work elsewhere. Tell me in your dissertation where you explain why I am wrong. If their is no advantage to keeping Fedex Ground and Fedex Express separate they will be merged. I suspect freight,LTL, custom critical will, like brown, stay separate.

FDXLAG,
If you ship something by next day air from Columbus, Ohio, and throw it in the box at 5 p.m. Goes on a "package car" to the ground terminal, then put it on an 18 wheel truck to Louisville, makes the sort and out the door. Mixture of air/ground networks.
The company has built co-terminals in some locations. If you ship a second day product on Wednesday from New York to Denver, Will say Second day Air on the package, but it went through various ground networks starting including our Team Drivers. Have a 300 pound package, or something LTL, depending on the various ground networks, they may place it on an airplane and then drop it back in a truck to the destination.
Simply, FedEx will learn to use all resources to ship to customers regardless of product. UPS does that now, it only goes on an airplane if no other way to get service via ground networks (plus rail!)
Don't take it serious, we were totally blindsided as pilots in our contracts. UPS had been working the solution over 5 years.
You know why UPS doesn't have fleets the size of your Caravans and ATR's? (Trucks instead)
See you added, the different subsidiaries certainly specialize, but they all are set to integrate with one another. UPS is very stovepiped. Leave the expertise at the local/regional specialty. Has logistic advantages, reason they make 'managers' move around like the military to understand the various nodes of transportation. This is all invisible to the customers who could care less how UPS/FedEx gets the shipment to the right place. Fred and UPS do though, and use all resources in a blended fashion.

Brother I don't care, my future is tied to the dubious fate of the $ (my money guy says the Franc has a better future). But the difference between UPS and Fedex is your ground and air are integrated ours isn't. There are advantages and disadvantages for Fred. Illiminate the advantages and it would be stupid to keep the disadvantages. Who knows maybe he will dump the express delivery drivers and go with his ground subcontractor model.

Interesting analysis of UPS vs Fedex
 

http://http://www.businessrecord.com...ArticleID=8027

Friday, April 24, 2009
UPS delivers more value than Federal Express

BY MALCOLM BERKO

Dear Mr. Berko:

I'm considering the purchase of either United Parcel Service or Fed-Ex Corp. I also have 50 shares of SunPower that I bought in January 2008 at $121 because my broker told me the stock would split 2-for-1 and run back up above $100. The stock is now $27, and I'd like to know if you think I should buy 100 or 200 shares. I think I need another broker, because in the past two years all he has given me are losers.

C.P., Kansas City, Mo.

Dear C.P.:

Both FedEx Corp. and United Parcel Service Inc. are superb companies.

UPS expects a decline in revenues from $51 billion to $49 billion for 2009 and a pickup in revenues to $53 billion for 2010. The consensus indicates earnings of $2.8 billion in 2009 and $3.4 billion in 2010.

FDX expects a slight decline in revenues from $37.9 billion 2008 to $37.5 billion in 2009, and an uptick to $38 billion in 2010. The consensus indicates earnings of $1.3 billion for 2009 and $1.4 billion for 2010.

I think UPS is a better company for the following reasons:

1. Net profit margins for UPS have averaged 8 percent over the past decade, which is twice the 4 percent net profit margins of FDX.

2. The UPS 10-year average return on shareholders' equity is about 22 percent, which is twice the 10-year average return of 11 percent for FDX.

3. UPS pays a dividend that has tripled in the last decade from 58 cents to $1.80 a share for 2009. FDX pays a niggardly dividend of 44 cents.

4. UPS uses 100,000 ground vehicles and 617 airplanes to produce $2.9 billion in net profits. FDX uses 1.4 million ground vehicles (is this correct???) plus 677 airplanes to produce $1.3 billion in net income.

5. Each UPS employee brings $6,500 in annual net income to the company's bottom line, while each FDX employee brings $4,500 in annual net income.

Both should do well during a recovery, but I suspect that the share price of UPS will perform better than the share price of FDX.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at [email protected]. © Copley News Service

Hopefully the Senate will be smarter and remove this portion on FedEx and the RLA. This will only cost jobs, lots of them. I wonder how many people are employed for building 30 777s, not to mention all of the drivers that might lose as well. This same attempt failed in 2007 when legislation passed the House but went down in the Senate.

It's really sad when something like this is inserted in the FAA Reauthorization bill and just shows how broken our system is.

Regardless of what happens, I wouldn't underestimate Fred and his ability

I don't think Fred needs or wants 777Fs right now anyway, there isn't any demand for Asia direct USA flights now. But Fred is smart and he'll figure out how to use them when the time is right.

Good luck when Fred gets it tuned up. He won't eliminate the advantages
He'll combine the models, minimize drawbacks. We are in the same business and merging models in the middle. My only point. Brother , I don't care either, UPS already optimized. We already lost the pilot jobs when they did.

I cannot believe the number of Union FedEx Pilots defending the actions their company to prevent workers (drivers/owners/whatever) from unionizing!!!!
***

I think you'll find most of us like "our" union, but take a skeptical eye towards anything that might hurt our company or have an effect on our long-term careers. For a good idea of the measure of support most airline pilots have for unions, simply check out the UPS thread on their MOU.

I've long since forgotten the details (not my dog, not my fight) but wasn't Fred Smith similarly upset when his pilots voted for ALPA representation? Whatever predictions of "doom-and-gloom" he may have made then certainly didn't come to pass.

As for job losses - The turnover in FedEx Ground drivers is already pretty high. Enough so, that normal attrition will quickly shrink the workforce to whatever size it needs to be. Being forced to pay industry-standard wages and benefits to those that remain will slow turnover and improve service.

The threat to cancel the 777 order amounts to little more than petty, sophmoric posturing by a businessman who should know better. Every time the subject comes up, he comes off like a petulant child, threatening to toss his oatmeal if he doesn't get his way. If he really wants to cancel the orders, let him. Boeing will build the airplanes anyway, and somebody else (maybe UPS?) will buy them. Then, in a few years when business has picked back up and he could really use the lift, he can re-instate his order at the new price for delivery 3-4 years hence.

This has been a valuable discussion.

As usual.

[QUOTE]I cannot believe the number of Union FedEx Pilots defending the actions their company to prevent workers (drivers/owners/whatever) from unionizing!!!! /QUOTE]
I don't think many here are against our EXPRESS drivers organizing. They just need to do it under the RLA since we are an airline. Few want Teamster locals on property though. Our mechs have been trying, as they should, however, the aforementioned won't allow them in unless the plane washers, lav emptiers, etc.. are included in the group. Hardly the same skill set. At least that's how it was explained to me by a salty ole' mech in OAK. The mechs are in it for a career as we are. I don't want the company held hostage by a group that doesn't intend to stay around for a career.

As long as we are shooting for hyperbole
 

I can't believe the number of Americans on here defending their governments action in removing property rights from individuals.

When the pollster calls and says do you identify more as a resident of your city/state/country do you start singing the internationale?

I'm not saying you're wrong but as you know, anyone can throw out something on the internet and call it a fact. Can you support this assertion re: turnover of FedEx Ground drivers, or did you just pull it out of your.....um....hat?

Neither...got it from a ground driver. I asked him why I'd had the same UPS guy for as long as I could remember, but never seemed to get the same FedEx guy twice. He gave me some perspective on how FedEx runs that end of the business, and it didn't sound too good. The hours are long and subject to change, the pay is a fraction of what their counterparts at UPS earn (about $14-/hr vs. $22), benefits are sketchy, and there is no security to speak of. Drivers jobs are always at the mercy of their boss, who can lose a service contract over issues that have nothing whatsoever to do with the driver. When that happens, the new contractor is under NO obligation to use the old drivers. It's a sucky deal.

If you want to get to the real truth to this matter, don't take my word for it, do your own research. Look in your local paper for "delivery driver" jobs...many are related to FedEx in some way. Apply for a job. You can be hired directly into a FedEx driver position, which is almost impossible at UPS. Ask your local drivers (both FedEx and UPS) how long they've each been with their respective companies. There's a lot of pride and longevity in the UPS workforce. Finding a FedEx Ground driver who will speak candidly with you is not always easy. Finding one who expects to retire from whatever cockamie "independent contractor" he works for is virtually impossible.

I still think FedEx would be a pretty good company for which to work. But FedEx Ground is not FedEx, IMHO.

I guess it's all perspective. I spoke with the owner my route. He loves it! He owns 3 routes. Employs 3 drivers, covers their routes for sick and vacation. Couldn't be happier.

I spoke to my driver in Seattle. She has been doing it for 14 years and loves it.

I've had the same FedEx (Express) delivery driver the 14 years I've lived in this house. Nice lady ...

Just rode home on the semi with a guy who's a 21 year employee and loves the company. One of the few places a guy can make a decent living and feed a family anymore without a college degree. Wish there were more solid middle class jobs left in this country...

not worth it