Did you mean Kool-Aid?
Kool-Aid - Wikipedia, the free encyclopedia

On the plus side, it probably means you never actually drank it.

But, Kool-Aid, is THE copyrighted name . . like Kleenex & FedEx

Did you guys read the message from Fred on the pilot's home page. I thought it was really well done and made no mention of any pilot furloughs. However, I'm sure that MM will see doom and gloom in this message, but that's because he's a glass-half-empty kind of guy.

JJ

FedEx Makes a Smarter Kind of Cut


By PETER EAVIS

FedEx may not look like the kindest company after announcing wage cuts Thursday. But the move could turn out to be one of the smartest corporate responses to the recession -- and may become widely mimicked.

If executed well, cuts in wages could even help the economy out of recession, not to mention benefiting the shareholders in the companies that do them.

In response to terrible shipping trends, FedEx said next year senior execs would have salaries pruned by 7.5%-10%, while other salaried employees would face a 5% reduction. Hourly workers aren't included in these cuts.

From an economic perspective, targeting salaries makes sense at FedEx. Wages and benefits are the largest single operating expense by far -- and are typically equivalent to just over a third of revenue.

Why might this approach work?

It could help avoid the disruptive and expensive process of firing lots of workers in a trough -- and the added cost of rehiring them when the recovery occurs. FedEx's decision to cut pay for its better-paid employees might also give management credibility to ask for cuts elsewhere if the recession drags on.

The macroeconomic benefit from cutting wages comes from three sources. First, if it does indeed lead to fewer layoffs, aggregate consumption may take less of a hit. Second, banks could face lower losses from debt defaults. Third, one of the good things about recessions is that they can bring certain prices down to sustainable levels, setting the foundation for an economic bounce back. It makes little sense for wages to be exempt from that adjustment.

"The faster you get prices, including the cost of labor, to equilibrate, the faster you can get on with the recovery," says Paul Kasriel, director of economic research at Northern Trust.

The risk is that wage cuts stoke labor discontent and lead to production disruptions in a time of economic weakness. The threat of a weak economy may not be a deterrent to industrial action. After all, it didn't deter strikes over the past 18 months at Boeing and American Axle.

Write to Peter Eavis at [email protected]

Well, I didn't want to get sued for using a copyrighted name. At FedEx I think it's actually Kewl-Ayd.

We'll trade your "glass-half-empty" MM guy for our 150% totally-dry-empty Biggs guy any day...

Just kidding folks...

After taking all of this in I applied mathematical equations to account for yellow paint, solar angle, carbon output, course corrections, Bernie Madoff and the positive affect of Christmas I have come to one conclusion....

My half empty glass of Baileys is now half full.

BTW isn't it ironic the man who allegedly stole 50mil pronounces his last name "made off" as in made off with all your money.

Not doom and gloom, and I certainly am not advocating a furlough BUT......so much for the two explanations why we wouldn't have furloughs. First, the one about how that type of news to the financial market would lead to a large sell-off of the stock. After the first-of-it's-kind announcement today, stock only dropped 1.7% on today's trading. My guess is it might actually cause a rise in the stock prices since Fedex will be seen as staying ahead of the curve. Second,(longstanding theory has it) if you're going to furlough for less than 18 months it is financially prohibitive due to re-training and re-qualification expenses. We are so fat right now on pilots they could send 250-500 of us packing, tweak up the optimizer a little more and reduce carryover and bada-bing...cash neutral.
And please spare me the response about "if you talk about it, they just might do it." The bean counters and decision-makers certainly don't waste their time reading the tea leaves of line pilots like me before they make their decisions.
All in all...if you're in that group of bottom 10% on the seniority list like I am, be prepared for anything after the first of the year. Actually had an over 60 guy tell me today that it would be "easier" for a young guy like me because I would have more time to recover from this kind of situation than he would. Made perfect sense to me seeing as how he has only had over 30 years with the company, sits carryover reserve and banks a cool 100 hours a month for sitting in Memphis. Good thing he can do that from a window seat. Who....ME bitter??!!

Soooo, what does this mean for us?

I gotta ask the obvious, I appreciate the effort noted in this thread by our superiors....but, WHY?!

WE STILL MADE MONEY THIS QUARTER (and the last couple dozen too, last time I checked)!

Am I the only one that reads these qtrly reports showing a PROFIT?!!!

What you are talking about, the Cash Balance Plan, replaced the non-pilot A-plan many years ago. The 401K plan was changed 1-2 years ago, and is the plan referenced in todays news. FDX matches the 1st 1% and half the next 5% of salary that a non-pilot employee contributes. As long as an employee contributes at least 6% of their salary, Fred was matching 3.5%. That is what the average employee loses. Using my SO as an example, that's about $1800 year, plus the 5% salary cut and no merit raise this year.

I hear ya, and to a point, I agree. But the profit is certainly down, and that's with some fairly significant cost cutting measures already in place.
I'm also glad to be part of a company that doesn't stick its head in the sand while pi$$ing away millions.