Friday, December 19, 2008

FedEx Cuts Workers' Retirement Compensation While CEO Rakes in Multimillion-Dollar Pension

More Drastic Cuts in Workforce Compensation Fuels Drive for Teamster Representation

FedEx Corp. today announced drastic cuts in pay and deferred compensation for most of its U.S. workforce. Salaried U.S. FedEx employees will take permanent 5 percent to 10 percent base salary reductions while FedEx founder, Chief Executive and Chairman Fred Smith will take a permanent 20 percent reduction in base salary.

According to company statements, hourly employees will not see base wages impacted in this round of cost controls.

"The FedEx workers that have made this company a household name and deliver the profits will now shoulder more insecurity for their futures," said Teamster General President Jim Hoffa. "At the busiest time of their delivery season, the company is delivering nothing but coal for its workforce."

More dramatically for hourly employees, bonus compensation and the company's 401(k) matching contribution will cease for 2009. This unilateral decision to stop 401(k) matches closely follows the June 2008 capping of FedEx Express employees' defined benefit pension. In announcing the end of the defined benefit plan in 2007 FedEx said, "Planning and saving for retirement is a partnership between FedEx and its employees, and we are committed to helping our employees enjoy a financially sound future."

Apparently, that "partnership" is no longer part of the corporation's future.
Although garnering headlines for his salary adjustment, Smith meanwhile retains $26,411,752 accrued under the FedEx Retirement Parity Pension Plan and $1,164,464 under the Employees' Pension Plan. Additionally, Smith's $1.4 million salary only comprised 13 percent of the $10.9 million that he raked in for 2008. In fact, 55 percent of Smith's 2008 pay was in stock options not tied to any performance goals.

As of May 31, Smith also held currently exercisable, in-the-money options worth $24.9 million, based on yesterday's closing stock price. In the past two years alone, he's exercised options worth more than $60 million. FedEx has not clarified if the company's variable compensation changes will affect Smith's outstanding, exercisable options or if FedEx will suspend option grants for 2009.

"FedEx workers have seen their wages stagnate, their health care costs go up and their retirement benefits go down or go away entirely while FedEx has pocketed millions in profits in good times," said Teamsters Vice President At Large and Package Division Director Ken Hall. "Many FedEx workers already see Teamster representation as a way to secure their future and these drastic measures will convince more of the value of a Teamster contract."

The difference in pay and compensation between management and workers is one factor leading FedEx workers to seek Teamster representation. The broken "Purple Promises" on wages and retirement benefits were the subject of a public Blue Ribbon Commission hearing on Dec. 16, jointly sponsored by the Teamsters, the Los Angeles County Federation of Labor, and Clergy and Laity for Economic Justice/Los Angeles (CLUE LA).

Blue Ribbon Commission members U.S. Rep. Linda Sanchez, Los Angeles City Councilman Bill Rosendahl and United Methodist Church (Los Angeles) Bishop Mary Ann Swenson heard testimony from a number of FedEx workers on their deteriorating work conditions and struggles to hold onto the middle class life.

"I could afford to retire at age 62 under the defined benefit pension plan but with the stroke of a pen, and with little warning and no input or discussion from employees, FedEx changed our retirement plans," said Dan Forrand, a 15-year veteran aircraft maintenance technician from FedEx Express in Los Angeles.

Now, as the economy suffers and FedEx Express employees' retirement security is in greater jeopardy, FedEx has pulled a bait and switch more drastic than even Forrand knew on Tuesday.

Forrand's statement and other testimony and questions are archived online at Additional information is at

Teamsters give $10,000 to Children's Home Society

Teamsters Local 175 delivered $10,000 worth of toys, food and financial donations to the Children's Home Society Thursday.

Twenty-two volunteers from the Teamsters and the Children's Society unloaded the truck.

"Our active and retired workers donated canned food and toys, said Ken Hall, a Teamsters international vice president.

"We have a Breakfast With Santa in December every year, where people bring canned food and toys. We also accept financial donations."

Teamsters moving to Mokena

After what officers of the union called a 20-year search for a new home, Teamsters Local 710 will move its offices from Chicago to a Mokena industrial park.

The new building, expected to be finished by October, will house about 60 employees of the local as well as its health, welfare and pension funds.

Chartered in 1903, the local now has its offices at 4217 S. Halsted St. and originally represented drivers working in Chicago's stockyards.

"The freight industry grew as the meat industry shrank," Pat Flynn, 710's secretary-treasurer, said at a groundbreaking Thursday for the new 30,000-square-foot building.

The nation's fourth-largest Teamsters local with 14,000 members, 710 represents drivers who work for companies such as ABF, Holland, Roadway, UPS and Yellow.

The local long had studied a move to the suburbs, said Jim Dawes, the local's president.

"This is a task that has literally taken 20 years," he said.

A ZIP code search of where its members live helped identify the southwest suburbs as the "perfect location" for an office that would be more accessible to 710's members, said Flynn, a Tinley Park resident.

"Our entire membership is out in this area today," he said. "This truly is the center of our universe here."

Apart from the union employees who'll work at the office, it will be frequently visited by members looking for information regarding insurance and pension issues, Flynn said. Local business, such as restaurants, could see increased business as a result, he said.

"Our members make decent money, and we spend it pretty well, too," Flynn said.
Having the local move its offices to the village will "bring a greater level of credibility and awareness" to Mokena, Mayor Joe Werner said. Another major union, the Pipefitters, also has offices and a training center in Mokena.

The union's office will be at 9000 W. 187th St. in Corporate Corridors, a business park being developed by Tinley Park-based TCB Development. It's the third such light industrial project undertaken in Mokena by TCB, which has built about 10 million square feet of commercial space in the Chicago area, primarily in the Southland.

Thursday, December 18, 2008

Obama settles on Rep. Hilda Solis as labor chief

President-elect Barack Obama's choice to be labor secretary, Democratic Rep. Hilda Solis of California, is expected to advocate greater union influence in the workplace and more "green" jobs.

Solis, the 51-year-old daughter of a Mexican union shop steward and a Nicaraguan assembly line worker, is in line to be the second Hispanic nominee in Obama's Cabinet. Obama planned to announce her nomination on Friday, said a labor official who spoke on condition of anonymity because an announcement had not been made yet.

The lone member of Congress of Central American descent, Solis would replace Elaine Chao, the only original member of President George W. Bush's Cabinet still in office.

Unions, which contributed heavily to Obama and Democrats this year, expect Solis to be an advocate for them and for workers. They expect her to press for legislation that would force businesses to recognize union representation once more than 50 percent of a company's eligible work force signs union cards, instead of waiting for secret-ballot elections.

Unions claim mangers coerce and intimidate workers into rejecting unions in secret ballots at work. Employers say workers often are coerced themselves by their peers to sign union cards and that a secret-ballot election is the only way to determine their true wishes.

"Unions are vital to the health and strength of our communities, and our workers are the bedrock of our economy," Solis said in 2007 while advocating for the Employee Free Choice Act. "In this day and age when the number of women and new immigrants is increasing in the work force, it is important that they become a part of the American fabric and one of the ways is to be a member of a union."

Solis' father was a Teamsters shop steward in Mexico.

"We're confident that she will return to the Labor Department one of its core missions — to defend workers' basic rights in our nation's workplaces," said John Sweeney, president of the AFL-CIO, the nation's largest labor organization.

Solis in 1994 was the first Latina elected to the California Senate, where she led the battle to increase the state's minimum wage from $4.25 to $5.75 an hour in 1996.

Andy Stern, president of the 1.9-million member Service Employees International Union, recalled marching with her in Los Angeles — well before she was elected to Congress — to seek higher wages and benefits for janitors.

"We were with her fighting for the rights of people who work from the beginning and we're so proud that she's been chosen to be the labor secretary," Stern said.

Environmental groups noted that while in Congress, Solis wrote a measure that authorized $125 million for work force training programs in areas such as energy efficiency retrofitting and "green building" construction.

"We can think of no better person to help President-elect Obama implement his plans for an economic recovery fueled by the creation of millions of new green jobs," said Carl Pope, executive director of the Sierra Club. "Hilda Solis also understands that green jobs must also be good jobs and has worked to make sure that the clean energy economy is one that lifts up all workers."

Business groups, ready to assume a more defensive posture during Obama's administration, responded cautiously to the news about Solis.

"There's a new sheriff in town, but they'll still have to deal with the business community and they know it," said Randy Johnson, vice president for labor issues at the U.S. Chamber of Commerce. "We would hope she will continue to support programs that help educate employers about voluntary compliance with the law rather than pursue heavy handed enforcement," he said.

Wednesday, December 17, 2008

UPS Extends Relationship with NHRA

Will Continue to Handle Delivery Needs Of World’s Leading Drag Racing League

UPS today announced it has extended its relationship with the National Hot Rod Association as the league’s Preferred Shipping and Logistics Supplier.

"On the race track, drag racing rewards quick, safe and on-time performance. Those traits are synonymous with UPS and consistent with how we fulfill the delivery needs of NHRA race fans, officials and competitors" said Ron Rogowski, UPS’s director of sponsorship. "So UPS is extremely pleased to continue this association"

UPS has served as the NHRA’s Preferred Shipping and Logistics Supplier since the 2006 season. In other forms of motorsports, UPS will continue as the Official Delivery Service of NASCAR in 2009, when it also begins a primary sponsorship of Sprint Cup Series driver David Ragan and Roush Fenway Racing.

"We share the growing excitement leading up to the 2009 debut of the NHRA Full Throttle Drag Racing Series season" added Rogowski. "UPS is proud of its association with the NHRA and looks forward to continuing to provide excellent delivery and logistics service to all those in and around the sport"

Tuesday, December 16, 2008

Los Angeles FedEx Workers Testify Before Blue Ribbon Commission Panel

Workers Struggling to Stay in Middle Class Hope to Join Teamsters

FedEx workers in Los Angeles testified today before a Blue Ribbon Commission panel that they are on the verge of slipping from the middle class because of dwindling benefits, higher out-of-pocket medical costs and an overall decline in workplace conditions.

The Blue Ribbon Commission hearing is co-sponsored by: the International Brotherhood of Teamsters; the Los Angeles County Federation of Labor, AFL-CIO; and Clergy and Laity United for Economic Justice (CLUE). Economic experts, clergy members and workers discussed ways to help the workers remain in the middle class and remedy the anti-union situation they are battling. The commissioners on the panel are: U.S. Rep. Linda Sanchez (D-CA); Los Angeles City Councilman Bill Rosendahl; and Bishop Mary Ann Swenson of the United Methodist Church, Los Angeles area.

The workers said they hope to form a union with the Teamsters to gain a good contract that would guarantee them job security, better wages and benefits. But they said those efforts have created an anti-union backlash at many workplaces, with the company holding anti-union mandatory meetings, distributing anti-union literature, showing anti-union videos at work and engaging in many acts of intimidation.

"Pro-union employees are followed into restrooms by managers who look over stalls," said Rudy Hernandez, a 20-year FedEx employee who currently is a FedEx Freight driver. "Dispatchers tell drivers if they vote the union in, FedEx will close down this terminal."

But despite all the anti-union activities, Hernandez and four FedEx Express aviation mechanics testified that they remain committed to forming a union with the Teamsters.
Dan Forrand, a Senior Aviation Mechanic Technician at FedEx Express, said he planned to retire when he turned 62. But when FedEx changed its defined benefit pension plan to a cash balance plan on June 1, Forrand knew he would have to work longer to recoup financial losses.

"I've calculated that I'll lose about $230,000 that I would have accrued under the defined benefit plan," Forrand said. "I am worried that I am slipping out of the middle class."

Economic experts and clergy members voiced their support for these workers and discussed ways to remedy their situation.

"The bottom line: without a union, FedEx mechanics have no job security," said Jon Zerolnick, Senior Research Analyst for the Los Angeles Alliance for a New Economy (LAANE). "Currently their jobs can be outsourced and hours cut -- and lives are seriously impacted -- at the whim of management. They need a union to protect jobs."

"As members of the Los Angeles clergy community, we hear these stories of struggle every day," said Pastor Bridie C. Roberts of CLUE LA. "These workers need the help of everyone to keep themselves and their families in the middle class."

Over the last few years, FedEx workers have taken a look at Teamster strength in their industry. The Teamsters represent about 240,000 full-time and part-time workers at UPS and 12,600 at UPS Freight. The UPS and UPS Freight workers are benefiting from strong contracts that guarantee them wage increases, job security, good health coverage and a pension plan that cannot be taken away. FedEx workers have no contract.

The Los Angeles County Federation of Labor, AFL-CIO, is focused on promoting a voice for workers so they can remain in the middle class, or move themselves out of poverty, by joining a union. The federation believes that in educating and mobilizing workers to be politically active they can create and sustain healthy communities.

CLUE was formed with the purpose of organizing the religious community to support low-wage workers in their struggles for a living wage, health benefits, respect, and a voice in the corporate and political decisions which affect them. CLUE LA is an interfaith association of more than 600 religious leaders throughout Los Angeles County who come together to respond to the crisis of the working poor.

Thousands of layoffs by DHL, ABX Air hit Wilmington, Ohio

As hard times go, this is about as hard as it gets. The single-biggest employer in these parts is laying off about 7,500 men and women.
In a town of fewer than 13,000 people. In the midst of the worst financial crisis in generations.

"It's going to test us," says Mayor David Raizk. "The numbers are frightening."

Those numbers came in a Nov. 10 announcement by Deutsche Post World Net, the German owner of package-delivery company DHL. After investing five years and nearly $9 billion, DHL is abandoning its ill-starred effort to compete in the United States with FedEx and UPS. Winding down its U.S. business will eliminate 9,500 DHL positions around the country plus thousands more here at the company's local partner, ABX Air.

DHL, which has long struggled in the U.S., said in May that ABX would likely lose business that supported thousands of workers. But the global financial crisis magnified shareholder pressure on DHL's German owner and accelerated the erosion at the No. 3 company in a three-company market, triggering DHL's exodus. Exposure to bankrupt investment bank Lehman Bros. blew a $450 million hole in third-quarter earnings at the German giant's banking subsidiary, while DHL's customers grew tightfisted amid the spreading economic malaise. Full Story Here.......

Monday, December 15, 2008

UPS Freight Accelerates Service to and from Central Illinois

UPS Freight, the heavy freight arm of UPS, today announced faster transit times between central Illinois and points throughout the United States.

The new, enhanced direct service places all of Illinois under a next-day blanket and draws major markets, including Dallas, Atlanta, Pittsburgh and Minneapolis, to within two days of central Illinois.

In all, some 250 lanes to and from central Illinois will see faster transit times. Over the past 18 months, UPS Freight has accelerated transit times on more than 12,000 lanes, including 4,200 just in 2008.

"We intend to aggressively grow our business," said Jack Holmes, president of UPS Freight. "These enhancements are part of a long-term strategy to combine speed, technology and reliability to create an unmatched offering for our customers."

The new offering includes time-definite guaranteed service for all shipments when moving under UPS Freight's current 560 Tariff, plus improved visibility since all UPS Freight shipments will be handled by company drivers equipped with handheld computers. The handheld devices allow immediate input into UPS's information data network, making it easy to manage inbound and outbound freight shipments.

UPS Freight, one of the largest less-than-truckload carriers in the United States and a leading truckload service provider, serves customers throughout North America, Puerto Rico, Guam and the U.S. Virgin Island.

Sunday, December 14, 2008

Teamsters Protest KeyBank at Arena

Bank Supports Labor Rights Violator Oak Harbor Freight Lines

Teamster members on strike at Oak Harbor Freight Lines protested outside of KeyArena in Seattle today. KeyBank, the corporate sponsor of KeyArena, is the main financier of Oak Harbor Freight Lines, where more than 600 Teamsters in the Northwest have been on strike for the past 12 weeks because of unfair labor practices by the company.

"We went to KeyArena to alert consumers that KeyBank doesn't want to help Washington families," said Al Hobart, Teamsters International Vice President and President of Teamsters Joint Council 28. "This bank supports the unfair labor practice strike we have at Oak Harbor, but they also cheat customers and lobby against Americans facing foreclosures."

The Consumer Federation of America reported that KeyBank uses deceptive practices to charge excessive and hidden overdraft fees. Worse, KeyBank sits on the board of several mortgage industry associations that fought to stop a Senate bill that would have prevented well over 1.2 million home foreclosures and avoided property declines of $200 billion.

"People need to know that KeyBank finances Oak Harbor Freight Lines," said Marv Deegan a retired Oak Harbor Freight employee. "Since Oak Harbor cut off our health care, I have to decide whether to eat or to pay my insurance premium. This is a terrible hardship for my family."

For the past 12 weeks, Teamster members have been walking strike lines in the Seattle area, and Portland. Soon after the strike began Oak Harbor announced they were ending the health care payments of striking workers and the retirees.

"It's cruel that any company could dump the health care of their retirees to the side of the road, but that's what Oak Harbor Freight has done," Hobart said. "And KeyBank is an equal partner with Oak Harbor in doling out hardship to families."