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Monday, December 22, 2008

Fed/Ex Makes News Again

Sometimes I feel like this blog should be called "Fed/Ex Distribution Business News" due to the fact that I am constantly reporting about Fed/Ex and their cutbacks and whatnot. Well, here we are again as the package delivery giant announced a 20% pay cut for CEO Fred Smith in addition to the suspension of their retirement plan contributions company-wide. The news comes in response to the bleak economic climate.
"Our financial performance is increasingly being challenged by some of the worst economic conditions in the company's 35-year operating history," Smith said in a statement. "It's tough, but it's a sign of the times," Al Meyers, portfolio manager of the AHA Diversified Equity Fund, which owns FedEx shares, said of the pay cuts. "The fact that executives including Fred Smith are taking pay cuts sends a message to employees that 'we're all in the same boat,' which is a positive."
Not only has Fed?Ex taken a hit with the financial crisis in full swing. UPS has seen overall volume declines as well as reduced share value on the NYSE index. The current economic slowdown that became a full blown recession is impacting the nation much like that sucking sound you here in the bathtub when you pull the stopper. The only question I have is when is somebody going to put the stopper back in instead of just running more water.