awesome and very true post
FedEx Freight | Trump's corporate tax cut for the windfall
- Thread starter Thom-8-Toes
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Fair enough. The biggest mistake I made was not factoring in WHERE this announcement was coming from. FedEx Corporate. NOT Freight, Express, etc. I didn't realize just how out of touch they are.
The priorities shown in the decision indicate just how far removed FedEx Corporation is from the thinking and sentiments of the actual employees (and leadership, for that mater) of Express, Freight, etc.
Look at this again:
The windfall at a glance (in billions)
1.5 Facilities in Memphis & Indi (47.%)
1.5 Funding existing pension (47.%)
0.2 Cost of early raise (0.63%)
3.2 Total investment stated in press release
The big (massive) numbers go to Express hub operations in Memphis/Indi, and to funding of the FedEx pension liabilities. Both, it would seem, appeal to the investor segment. Priority one at FedEx Corporation.
Only 0.625%, as announced, is to go to hourly and salaried wages/bonuses. Clearly NOT priority one.
<———- insert lubeOutstanding points, Point!
Just a couple things I'd like to add...
Again, I want to restate this:
The priorities shown in the decision indicate just how far removed FedEx Corporation is from the thinking and sentiments of the actual employees (and leadership, for that mater) of Express, Freight, etc."
We can't blame Freight people for something they were NOT a party to, but we can certainly call out Corporate, for stepping in it, which they did, IMHO.
This puts management at Express, Freight, etc in the uncomfortable position of having very little to work with, in terms of employee enhancements. They also get the burden of explaining to us how this is GREAT news, and of significant benefit to the Company as a whole, as well as each employee, which is (of course) absolute nonsense. The spin should be interesting and painful to watch.
Who in their right mind thinks that more heavily funding any existing pension will increase market share or contribute to PSP, at all? Simply reducing the stated pension number by $400M (to $1.1B) could have tripled the employee benefit gain, having a far greater impact on the entire operation.
I'm going to quote myself here, in order to correct my position:
The reality is that the $200M wage/bonus number almost certainly has to be a somewhat grey number, based on unknown figures.
Knowing that annual increase amounts are never known (by anyone) this early in the calendar year, that figure is almost certainly a general guess, or approximation of the cost, rather than a definite amount. If that number is absolute, and limits what the raise can be, this will have been the biggest misstep. Perhaps ever.
None of this changes the disappointment factor, but it does leave the door open to possibility.
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Oh, and on the Pension $:
More unanswered questions. We know it means nothing, in terms real dollars to the workforce, but do we even know which pension it goes into? I'm no pension expert but the press release says “A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.”
Don't know about you, but my pension statement reads “FedEx FREIGHT Pension Plan”. Is it the same, or much like the retiree healthcare benefit (or lack thereof)? Does it come down to whether you work for FedEx Freight Corporation vs FedEx Freight Inc. (there is a significant difference) or the fact that we don't work for FedEx Corporation, at all. Not going further into the weeds on that, beyond the question, does it even remotely apply to us at Freight?
More unanswered questions. We know it means nothing, in terms real dollars to the workforce, but do we even know which pension it goes into? I'm no pension expert but the press release says “A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.”
Don't know about you, but my pension statement reads “FedEx FREIGHT Pension Plan”. Is it the same, or much like the retiree healthcare benefit (or lack thereof)? Does it come down to whether you work for FedEx Freight Corporation vs FedEx Freight Inc. (there is a significant difference) or the fact that we don't work for FedEx Corporation, at all. Not going further into the weeds on that, beyond the question, does it even remotely apply to us at Freight?
Correction:
1.5 Facilities in Memphis & Indi (47.0%)
1.5 Funding existing pension (47.0%)
0.2 Cost of early raise (6.25%)
3.2 Total investment stated in press release
Redracer3136
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I hate to say I told you so but 47% of the windfall to go towards upgrading facilities...well, I was partially right anyways. I would’ve thought they would’ve helped some of our centers that are in some pretty dire situations but I forgot we ARE the black sheep of the family!!
You were certainly on the right track, & far closer to being correct than I was. The truth was even worse than you predicted. A lot worse.
That 1.5B is going to upgrading just two facilities, Memphis & Indianapolis. Both at the core of the Express operation. We can speculate and watch for keywords like modernize, streamline, etc. More on what that means for Express personnel later. Or maybe we'll leave that alone. Regardless, much of that cost will be expensed 100% in the same year of purchase. Mr. Smith already said this eliminates much of the risks involved, providing immediate return.
For anyone curious about why such a huge voluntary contribution to pension plans, check out this story from 2017. It explains some of the benefits. Hint: Significant financial gains/savings.
http://www.pionline.com/article/201...m-spurs-hefty-corporate-pension-contributions
"FedEx Corp., Memphis, Tenn., offered $1.2 billion in new bonds at the beginning of 2017, $1 billion of which was set to be used to fund pension contributions."
Even though the (annual) expected benefit (per all reports) is $1.5B, all of the above helps explain why they are spending double the 1st year windfall. Truth is, there is a built in return. All GREAT NEWS for the investor class.
As for the increased hourly and salaried employee spending? Seems like more of an obligatory (token) afterthought...
So, if you want to participate the the gains, as they are being dispersed... Take your windfall from the early raise and buy yourself 3 or 4 shares of FedEx stock. Hang the stock certificate on the wall and know that is your portion of the 15% windfall profit. <insert sarcasm>
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Why does it seem that 15 percent is becoming the staple figure of pay raises,and or cuts in the industry?You were certainly on the right track, & far closer to being correct than I was. The truth was even worse than you predicted. A lot worse.
That 1.5B is going to upgrading just two facilities, Memphis & Indianapolis. Both at the core of the Express operation. We can speculate and watch for keywords like modernize, streamline, etc. More on what that means for Express personnel later. Or maybe we'll leave that alone. Regardless, much of that cost will be expensed 100% in the same year of purchase. Mr. Smith already said this eliminates much of the risks involved, providing immediate return.
For anyone curious about why such a huge voluntary contribution to pension plans, check out this story from 2017. It explains some of the benefits. Hint: Significant financial gains/savings.
http://www.pionline.com/article/201...m-spurs-hefty-corporate-pension-contributions
"FedEx Corp., Memphis, Tenn., offered $1.2 billion in new bonds at the beginning of 2017, $1 billion of which was set to be used to fund pension contributions."
Even though the (annual) expected benefit (per all reports) is $1.5B, all of the above helps explain why they are spending double the 1st year windfall. Truth is, there is a built in return. All GREAT NEWS for the investor class.
As for the increased hourly and salaried employee spending? Seems like more of an obligatory (token) afterthought...
So, if you want to participate the the gains, as they are being dispersed... Take your windfall from the early raise and buy yourself 3 or 4 shares of FedEx stock. Hang the stock certificate on the wall and know that is your portion of the 15% windfall profit. <insert sarcasm>
Who is curious about if our vacation pay rate will be recalculated? Could this also effect the OR enough to skew our next AIC payout? Surprised no mention of buying more/extra trucks for the residential delivery program.
As a side note: "Bremen sees three general trends among employers. One group is using the tax bill windfall to make previously planned investments, such as raising the minimum wage or increasing 401(k) contributions...Almost 20 percent of companies surveyed said they had already added Roth 401(k) retirement plans for employees, making it the most popular benefit change as a result of the tax bill." Adding a Roth IRA option to our package would have cost next to nothing and been an enhancement better serving us then the pension dump.
As a side note: "Bremen sees three general trends among employers. One group is using the tax bill windfall to make previously planned investments, such as raising the minimum wage or increasing 401(k) contributions...Almost 20 percent of companies surveyed said they had already added Roth 401(k) retirement plans for employees, making it the most popular benefit change as a result of the tax bill." Adding a Roth IRA option to our package would have cost next to nothing and been an enhancement better serving us then the pension dump.
Crazy Trucker
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Why all that money put in pension? All the clowns on here said it was fully funded. 
silent trucker
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It's called "over funding" and allows the company to invest more "aggressively". They don't just buy safe bonds. They can buy growth stocks and ride a market upsurge to increase benefits down the line. Viking did this in the late 90's. Oops, I mentioned Viking...RC and the gang in his head will go haywire!Why all that money put in pension? All the clowns on here said it was fully funded.
ST
silent trucker
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To quote "Blondie"; "dreamin' is free". And you're dreaming. The pay can't even up. Whether you want to admit it or not, the company needs drivers in places that are insanely expensive to live, such as silicon valley, Denver, Seattle and San Diego. Unless you're crazy enough to claim we can quit servicing those areas, the company has to pay the going rate for a very difficult labor market.
ST
Crazy Trucker
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What does raising the gpd at certain locations have to do with locations that are already making the higher rate?
Crazy Trucker
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Yeah that pension needs all the help it can get. Lmao
Ya just like the all mighty "horse head" funds. (Central States).Why all that money put in pension? All the clowns on here said it was fully funded.
I agree. If you live in a market with a higher cost of living you need to get paid more. You just proved my point, Here in CHS a few drivers have proven on paper to Putnum, Pullien,Davis,Moore and Goddard that it costs more to live in CHS than it does to live in CLT, ATL,GBO,HKY,RDU,RGH,RCH-----and all we get is lies. We can't even get the same answer from two different members of mgmt. SO with the extra money the company is about to see maybe they can see their way to correcting pay scales in certain areas. JUST MY 2 CENTS from a longtimer
This driver is ABSOLUTELY CORRECT. Refer to the "flawed GPD" thread for proof positive specifics.
Everyone (if being honest) has been aware, for a very long time. Charleston, SC is by far the shining example of the flaw, not just C.O.L., but competitive wage as well. Also shows there is zero credibility and/or integrity in the narrative of being constantly monitored for need.
As much as I've pushed for corrections at several locations, even I would support them being bumped. Even if noone else was deemed worthy. They are the extreme example. The proof of a flawed system, by any measurement.
Crazy Trucker
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Doubt the gpd will ever be looked at again, unless they are having trouble keeping drivers at a certain location.