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VaB
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I like to try not to post negative stuff, but this is pretty relevant to everyone at FedEx. It specifically says that it doesn't involve pilots.
http://www.gomemphis.com/mca/business/article/0,1426,MCA_440_2007000,00.html
By Dave Darnell
FedEx offers early out
Time to go for 14,000?
By Richard Thompson
[email protected]
June 3, 2003
FedEx Express is offering voluntary retirement or severance incentives to 14,000 U.S.-based employees, roughly 12 percent of its domestic workforce.
The incentives represent a first in the Memphis-based overnight air express delivery service's 30-year history and underscore the company's need to further reduce costs in the face of declining revenue that it has struggled with since before the Sept. 11, 2001, terrorist attacks.
For FedEx Express employees, deciding whether to retire or be bought out places another heavy choice on top of other crucial decisions they must make this year. By the end of August, 137,000 eligible FedEx employees must also choose between two pension alternatives.
FedEx Express, the largest business unit of parent FedEx Corp., announced the retirement and buyout plan after the stock market closed Monday.
It is offering the voluntary incentives to salaried staff and management employees. FedEx Express employs 116,000 people in the United States.
The incentive programs are not being offered to nor do they affect hourly employees, including those at the Memphis superhub; customer service representatives; couriers; and pilots.
FedEx estimates the annual savings from these incentives at $150 million to $190 million, starting a year from now.
FedEx isn't speculating on how many workers in Memphis will accept retirement or severance. FedEx Express employs more than 30,000 in Memphis, many of whom work at the superhub at Memphis International Airport.
Besides the parent company, Memphis is also the headquarters for two other FedEx operating companies - FedEx Freight (the regional less-than-truckload unit) and FedEx Trade Networks (customs brokerage unit) - and FedEx Services, which provides support for all of the FedEx companies.
FedEx Ground, the ground small-package delivery unit, is based in Pittsburgh, Pa., and FedEx Custom Critical, the time-critical shipping unit, is based in Akron, Ohio.
On Sunday, FedEx's new cash balance pension plan went into effect for new employees but current employees eligible as of May 31 must decide by Aug. 29 whether the new plan or the traditional pension plan is best suited for their retirement needs.
FedEx spokesman Sandran Munoz said Monday that those who take voluntary retirement will get an extra month to make a decision about their pension plans.
Salaried employees who have five years of credited service and are at least 50 years old qualify for the voluntary retirement benefits under the plan announced Monday. Employees who want voluntary retirement have until Sept. 30 to elect that option.
The second option, a voluntary severance plan, is available to all salaried domestic FedEx Express employees regardless of age or tenure. Eligible workers have until Nov. 24 to decide.
Satish Jindel, a principal with SJ Consulting Group in Pittsburgh, said the incentive programs are in line with FedEx's philosophy of not laying off workers, but rewarding them.
Depending on the employee acceptance rates, FedEx said it expects a pretax charge for the incentives to be in the range of $230 million to $290 million in its fiscal 2004, which began Sunday. Most of the charge will be incurred in the first half of the fiscal year; about one-third of the pretax charge will be cash, the $22 billion company said.
FedEx said it expects to save $100 million to $130 million from these incentives, primarily in the second half of its fiscal year. To that end, it expects the net cost of the incentives to be $130 million to $160 million in fiscal 2004.
The voluntary incentives are expected to affect FedEx's fiscal 2004 earnings by 25 cents to 30 cents a share, the company said.
Analysts said rumors have been circulating for some time about the need for further cuts at FedEx Express.
FedEx Express has seen negative growth in domestic package volume since the December 2000-February 2001 quarter. Volume level hit bottom in the July-September period of 2001, dropping 10.5 percent. Since then, it has improved, falling 0.7 percent in the December 2002-February 2003 quarter.
U.S. shipments accounted for 88 percent of FedEx Express's average daily volume in its fiscal third quarter, ended Feb. 28.
FedEx's chief rival, United Parcel Service Inc., saw its next-day air volume rise 3.9 percent in the first quarter of the year; but analysts say that is offset by FedEx's growing market share for ground shipments, a key component of UPS business.
FedEx Corp. chairman Frederick W. Smith, notes that international express, small package ground and heavy freight have fueled FedEx with "impressive" growth rates as its hallmark business has suffered because of the economy.
"In recent years, FedEx has pursued a strategy to expand and diversify its portfolio of services," Smith said in a statement Monday.
"This strategy has enabled the company to perform well during these challenging economic times by growing our revenue 10 percent and earnings per share by 17 percent for the first nine months of fiscal year 2003.
"By operating our networks independently, we have the flexibility to expand or contract each network as customer demand or business conditions dictate," he added.
Over the past few years, FedEx Express has managed its costs through a hiring freeze, reducing aircraft orders, consolidating facilities and reducing discretionary spending. The voluntary incentives are "yet another step," said David Bronczek, FedEx Express's president and chief executive officer.
FedEx realizes that the U.S. express delivery business it created 30 years ago has matured and now will only grow as fast as the national gross domestic product, said Arthur Hatfield, an analyst with Morgan Keegan & Co.
"It's a mature company," said Hatfield. "Over the past few years, they have built a pretty large bureaucracy. . . . It (the need for fewer employees) just happens when companies get larger."
Going forward, FedEx said it expects the U.S. economy to remain sluggish in the fiscal first quarter, but the economic picture will likely improve as the year progresses.
FedEx cited improving financial markets, the recently approved tax stimulus package and improved consumer confidence among other factors behind its outlook.
Although FedEx has said it sees significant increases in health care and pension costs in fiscal 2004, the company said it should earn 52 cents to 60 cents per diluted share in the fiscal first quarter - excluding the cost of the incentives.
FedEx's stock price finished normal trading hours at $64.61, up 63 cents. At one point Monday, the stock struck a 52-week high
http://www.gomemphis.com/mca/business/article/0,1426,MCA_440_2007000,00.html
By Dave Darnell
FedEx offers early out
Time to go for 14,000?
By Richard Thompson
[email protected]
June 3, 2003
FedEx Express is offering voluntary retirement or severance incentives to 14,000 U.S.-based employees, roughly 12 percent of its domestic workforce.
The incentives represent a first in the Memphis-based overnight air express delivery service's 30-year history and underscore the company's need to further reduce costs in the face of declining revenue that it has struggled with since before the Sept. 11, 2001, terrorist attacks.
For FedEx Express employees, deciding whether to retire or be bought out places another heavy choice on top of other crucial decisions they must make this year. By the end of August, 137,000 eligible FedEx employees must also choose between two pension alternatives.
FedEx Express, the largest business unit of parent FedEx Corp., announced the retirement and buyout plan after the stock market closed Monday.
It is offering the voluntary incentives to salaried staff and management employees. FedEx Express employs 116,000 people in the United States.
The incentive programs are not being offered to nor do they affect hourly employees, including those at the Memphis superhub; customer service representatives; couriers; and pilots.
FedEx estimates the annual savings from these incentives at $150 million to $190 million, starting a year from now.
FedEx isn't speculating on how many workers in Memphis will accept retirement or severance. FedEx Express employs more than 30,000 in Memphis, many of whom work at the superhub at Memphis International Airport.
Besides the parent company, Memphis is also the headquarters for two other FedEx operating companies - FedEx Freight (the regional less-than-truckload unit) and FedEx Trade Networks (customs brokerage unit) - and FedEx Services, which provides support for all of the FedEx companies.
FedEx Ground, the ground small-package delivery unit, is based in Pittsburgh, Pa., and FedEx Custom Critical, the time-critical shipping unit, is based in Akron, Ohio.
On Sunday, FedEx's new cash balance pension plan went into effect for new employees but current employees eligible as of May 31 must decide by Aug. 29 whether the new plan or the traditional pension plan is best suited for their retirement needs.
FedEx spokesman Sandran Munoz said Monday that those who take voluntary retirement will get an extra month to make a decision about their pension plans.
Salaried employees who have five years of credited service and are at least 50 years old qualify for the voluntary retirement benefits under the plan announced Monday. Employees who want voluntary retirement have until Sept. 30 to elect that option.
The second option, a voluntary severance plan, is available to all salaried domestic FedEx Express employees regardless of age or tenure. Eligible workers have until Nov. 24 to decide.
Satish Jindel, a principal with SJ Consulting Group in Pittsburgh, said the incentive programs are in line with FedEx's philosophy of not laying off workers, but rewarding them.
Depending on the employee acceptance rates, FedEx said it expects a pretax charge for the incentives to be in the range of $230 million to $290 million in its fiscal 2004, which began Sunday. Most of the charge will be incurred in the first half of the fiscal year; about one-third of the pretax charge will be cash, the $22 billion company said.
FedEx said it expects to save $100 million to $130 million from these incentives, primarily in the second half of its fiscal year. To that end, it expects the net cost of the incentives to be $130 million to $160 million in fiscal 2004.
The voluntary incentives are expected to affect FedEx's fiscal 2004 earnings by 25 cents to 30 cents a share, the company said.
Analysts said rumors have been circulating for some time about the need for further cuts at FedEx Express.
FedEx Express has seen negative growth in domestic package volume since the December 2000-February 2001 quarter. Volume level hit bottom in the July-September period of 2001, dropping 10.5 percent. Since then, it has improved, falling 0.7 percent in the December 2002-February 2003 quarter.
U.S. shipments accounted for 88 percent of FedEx Express's average daily volume in its fiscal third quarter, ended Feb. 28.
FedEx's chief rival, United Parcel Service Inc., saw its next-day air volume rise 3.9 percent in the first quarter of the year; but analysts say that is offset by FedEx's growing market share for ground shipments, a key component of UPS business.
FedEx Corp. chairman Frederick W. Smith, notes that international express, small package ground and heavy freight have fueled FedEx with "impressive" growth rates as its hallmark business has suffered because of the economy.
"In recent years, FedEx has pursued a strategy to expand and diversify its portfolio of services," Smith said in a statement Monday.
"This strategy has enabled the company to perform well during these challenging economic times by growing our revenue 10 percent and earnings per share by 17 percent for the first nine months of fiscal year 2003.
"By operating our networks independently, we have the flexibility to expand or contract each network as customer demand or business conditions dictate," he added.
Over the past few years, FedEx Express has managed its costs through a hiring freeze, reducing aircraft orders, consolidating facilities and reducing discretionary spending. The voluntary incentives are "yet another step," said David Bronczek, FedEx Express's president and chief executive officer.
FedEx realizes that the U.S. express delivery business it created 30 years ago has matured and now will only grow as fast as the national gross domestic product, said Arthur Hatfield, an analyst with Morgan Keegan & Co.
"It's a mature company," said Hatfield. "Over the past few years, they have built a pretty large bureaucracy. . . . It (the need for fewer employees) just happens when companies get larger."
Going forward, FedEx said it expects the U.S. economy to remain sluggish in the fiscal first quarter, but the economic picture will likely improve as the year progresses.
FedEx cited improving financial markets, the recently approved tax stimulus package and improved consumer confidence among other factors behind its outlook.
Although FedEx has said it sees significant increases in health care and pension costs in fiscal 2004, the company said it should earn 52 cents to 60 cents per diluted share in the fiscal first quarter - excluding the cost of the incentives.
FedEx's stock price finished normal trading hours at $64.61, up 63 cents. At one point Monday, the stock struck a 52-week high
C-17->Majors
Active member
- Joined
- Dec 3, 2001
- Posts
- 41
New FCIF from chief pilot posted this am addresses hiring among other things. Big picture, the company is working on improving the bottom line, therefore hiring is "doubtful anytime soon." He did mention the overall need for more pilots.
I wouldn't be too concerned about the early retirement offer for nonoperators. Express is a big company that always has the ability to lean up some. The economic recovery, the postal contract and pending retirements all create pressures that will result in hiring.
Hang in there.
I wouldn't be too concerned about the early retirement offer for nonoperators. Express is a big company that always has the ability to lean up some. The economic recovery, the postal contract and pending retirements all create pressures that will result in hiring.
Hang in there.
Spur
Well-known member
- Joined
- Feb 2, 2002
- Posts
- 214
Okay, I heard a good one...
FedEx is considering B737-300 or -400 cargo conversions for a B727 replacement. They decided against the B757 because it was too big, and the same with more A300/310s. I know this is a really old rumor, newly resurrected, but the new twist is that they are planning on using it in Europe to open up new markets, then slowly replace the 727s domestically as they fade away.
I haven't heard anything about new hire class dates.
FedEx is considering B737-300 or -400 cargo conversions for a B727 replacement. They decided against the B757 because it was too big, and the same with more A300/310s. I know this is a really old rumor, newly resurrected, but the new twist is that they are planning on using it in Europe to open up new markets, then slowly replace the 727s domestically as they fade away.
I haven't heard anything about new hire class dates.
Boeing has been marketing the 737 retread cargo version for over 2 years and have not gotten much traction in the marketplace. The have recenty talked to Airborne about the same thing. The 757 can carry a shade less than the DC-8 so it is not a comparable replacement for the 727 or DC-9.
Bigger isn't always better. The integrators (UPS, FDX, ABF/DHL) can't always use the extra capacity, especially for stops closer to the hubs. Unfortunately it is not a matter of just adding more stops to fill up the plane. To make the sort and morning delivers you can only do about 3 legs in or out (max).
Though the cargo doors and tubes are a plus, the planes still have their old motors. So in my mind it is hard to justify buying a fleet of new-old planes if the buyer doesn't get the advantage of newer technology fuel efficiency. Maybe BA will discount them enough to start peddling them.
Bigger isn't always better. The integrators (UPS, FDX, ABF/DHL) can't always use the extra capacity, especially for stops closer to the hubs. Unfortunately it is not a matter of just adding more stops to fill up the plane. To make the sort and morning delivers you can only do about 3 legs in or out (max).
Though the cargo doors and tubes are a plus, the planes still have their old motors. So in my mind it is hard to justify buying a fleet of new-old planes if the buyer doesn't get the advantage of newer technology fuel efficiency. Maybe BA will discount them enough to start peddling them.
AlbieF15
F15 Ret/FDX/InterviewPrep
- Joined
- Nov 25, 2001
- Posts
- 1,764
Don't know hiring/training ramifications, but the south route (Brazil, Chile, Argentina) has been rumored to be on chopping block as unprofitable. Our next Int'l bid did not mention the old VCP layover. Maybe it moved to another jet, but I think its just GONE. Less destinations and service may not bode well for more lines, more hiring, etc. Our South America routes are a very small piece of the international picture, but again...the emphasis right now seems to be on cost control vice expansion.
Good luck poolies....hang tough. Hopin' things break loose soon.
Good luck poolies....hang tough. Hopin' things break loose soon.
An MD-11 Capt bud of mine told me a rumor that the post office still wants to give FedEx more business, but wants the labor situation cleaned-up, i.e. get the contract moving. He thought there might be a couple year extension type thing pitched from the company to shore up some new postal flying.
Wonering if anyone else heard this...
h.
Wonering if anyone else heard this...
h.
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