Canyonman

FedEx CEO: Tax carbon, end our dependence on foreign oil

By Bartholomew Sullivan
Wednesday, September 23, 2009



WASHINGTON -- FedEx CEO Frederick W. Smith made his case Wednesday for a tax on carbon, a reduction in the payroll tax and expensing of capital equipment, speaking at a panel discussion with other CEOs at the Council on Competitiveness National Energy Summit.

Saying that ending the nation's dependence on foreign oil is more "enlightened self-interest" than a crusade, Smith noted that the Memphis-based logistic giant consumes 1.5 billion gallons of fuel a year. He called it a matter of both national and economic security.

Smith said his work with the Energy Security Leadership Council with retired generals and admirals made him realize that "we're spending 600 and some odd billion dollars on national defense -- 50 to 60 cents of every dollar is directed to protect the oil trade."

George A. David, chairman of United Technologies Corp., argued that more efficient building codes and standards and more investment in research and development are high priorities. He noted that the elevators his company makes use 25 percent of the energy they used to because they now recapture the energy of descent.

Jonathan Lash, president of the World Resources Institute, made the case for pricing carbon and agreed with David that the free allowances in current cap and trade proposals are a mistake. John Krenicki Jr., CEO of GE Energy Infrastructure, said the U.S. came late to renewable energy compared to Europe.

Smith took the opportunity in a question by moderator Richard M. Smith of Newsweek to argue that the tax code is prejudiced against capital investment.

"If you want to make a blue-collar worker more productive and allow them to make more money, you have to invest in training, infrastructure and capital," Fred Smith said. "The reality is our tax code in the U.S. promotes financial speculation, leverage and private equity, and penalizes capital investment. With a stroke of a pen, the Congress could change the dynamics, and that would be to allow for the expensing of capital equipment."

On the carbon tax, Smith said he prefers it to cap and trade because he suspects "an army of lobbyists" will be employed making exceptions to it so it becomes something like the 170,000-page tax code.
A predictable, graduated tax would have an impact on the role of the military overseas, improve the environment and be good for the economy, Smith argued.

When Richard Smith asked him how he could escape being called a socialist with his plan, Fred Smith recalled spending two years on one of the country's overseas "adventures" in Indochina.
"If people want to call me a socialist for recognizing these huge costs -- externalities -- of our national defense, not to mention the 5,000 young men and women who have lost their lives in this thing and the thousands who have been maimed and wounded, we need to solve this problem," he said.

"The failure to do it is not only going to create serious consequences in terms of our economy, but we're going to make a big mistake and get into a big conflagration over this thing," he predicted.

bleedairpacks

The article failed to state that Fred is the highest paid airline CEO in the world.

fdx727pilot

One - He's no revolving door flavor of the week CEO. He started the company and still runs it.

Two - We're making money. We almost always do.

It's nobody but the shareholder's business how much Fred gets paid.

⌐ AV8OR WANNABE

...and he probably should be. Tilton on the other hand should work for free. ...or actually he should be paying millions of dollars in "bad leadership" fines for each year he stays at ual.

AirbusA320

My take on Fedex, it's more of a trucking company. The have about 8 divisions and only one division uses aircraft. Of the 600 plane fleet 300 are C208. To add insult to injury I read on this site that Fedex looks down upon SE turbine time. So some guys are only good enough to fly sp IFR to fill the big birds but not good enough to fill the rh seat. Talk about creating a moral problem.

Fedex was an airfreight company that morphed into a trucking company and UPS was a trucking company that morphed into an airfreight company.

AirbusA320

I forgot to add:

Airplanes for show and trucks for dough.

Jetjok

1. FedEx Express is an airline, which is a subsidiary of FedEx Corporation. The other company's of FedEx are: FedEx Ground, FedEx Freight, FedEx Office, FedEx Custom Critical, FedEx Trade Networks and FedEx Services. Some are trucking companies, some are not.

2. Most FedEx Express pilots probably don't even consider the C208's as being a part of FedEx Express, and that's because they aren't. Although they are owned by FedEx Corporation, they are usually operated by totally separate companies.

3. As for hiring, the guys who fly the C208's can apply, just like everyone else who meets the minimum requirements, for a flying position at FedEx Express, but of the ones that I've talked to over the years, they are, very happy with what they do and the fact that they get to sleep in their own bed each and every night.

4. The FedEx Express pilot group does have some moral issues, but not because of anything you've mentioned.

5. Federal Express Corporation was an airline that morphed into FedEx Corporation, and along the way, became a global leader in not only air freight, but freight in general, as well as other customer oriented services.

JJ

FDXLAG

You forgot to mention the airline paid for all the other crap, and still is where most of the profits come from.

md11phlyer

And it's the world's largest widebody jet fleet.

Pretty fancy for a trucking company.

Need4Speed

So what? I fly for his competition, but I would gladly welcome Fred Smith as the next UPS CEO; with a salary increase from whatever he is being paid by FedEx. That, my friend, is called "Supply and Demand".