CEO Fred Smith promises bright future for FedEx, Memphis
FedEx Chief Executive Frederick W. Smith exuded optimism Monday in his USD 40 billion company’s future and Memphis’ place at its epicenter.
The Chairman, President and CEO said it would be hard for FedEx not to double in size as the company strengthens connections to emerging economies from Asia to Brazil.
Smith spoke after an annual meeting at The Peabody in which shareholders torpedoed proposals that would have split his duties and required nonbinding referendums on executive pay.
The proposals advocated by International Brotherhood of Teamsters General Fund and spokesman Louis Malizia won slightly more votes than last year, but failed by a 2-1 margin. Results were announced to an audience of about 150.
The votes came after Smith reaffirmed the company’s position that FedEx Ground drivers are independent contractors, not employees, as Teamsters assert. A class-action lawsuit is pending.
With 33,000 employees in the Memphis area, FedEx is the city and Tennessee’s largest private employer. Its superhub makes Memphis International Airport the world’s largest volume cargo airport.
FedEx chief executive Frederick W. Smith exuded optimism Monday in his USD 40 billion company’s future and Memphis’ place at its epicenter.
The chairman, president and CEO said it would be hard for FedEx not to double in size as the company strengthens connections to emerging economies from Asia to Brazil.
“Whether FedEx becomes an USD 80 billion company in 10 years or 20 years or what have you, I don’t know,” Smith, 64, said in an interview with The Commercial Appeal after the company’s annual meeting at The Peabody Monday. “But I’m pretty confident … it will reach those levels because it’s hooked into such powerful forces.
“The growth in the international business is very substantial,” he said. “The reason for that is the emergence of China and India and Brazil as major economic forces in the world.”
Smith spoke after an annual meeting at The Peabody in which shareholders torpedoed proposals that would have split his duties and required nonbinding referendums on executive pay.
The proposals advocated by International Brotherhood of Teamsters General Fund and spokesman Louis Malizia won slightly more votes than last year, but failed by a 2-1 margin. Results were announced to an audience of about 150.
The votes came after Smith reaffirmed the company’s position that FedEx Ground drivers are independent contractors, not employees, as Teamsters assert. A class-action lawsuit is pending.
With 33,000 employees in the Memphis area, FedEx is the city and Tennessee’s largest private employer. Its superhub makes Memphis International Airport the world’s largest volume cargo airport.
Smith assured share owners and Memphis residents FedEx will weather a confluence of high fuel prices, financial institution failures and a weakening world economy.
“We may go through a tough time here with the financial meltdown, but I think we’ll get on the other side.”
Smith said Memphians shouldn’t see much change in the short term, beyond the hub adding gates as it absorbs the Tennessee Air National Guard base, which is relocating.
“We’re being tough on adding any people at all right now, so maybe (employment) drifts down a bit just through attrition and so forth,” he said. “But over time, I would be surprised if it doesn’t stay where it is or drift up a bit. But we have no plans to materially change our presence in Memphis.”
Smith called the current environment one of the most challenging times in the company’s history.
“It’s clearly been a challenge. We just can’t absorb those kinds of (fuel) costs and keep our earnings growing,” he said. “So our earnings went down last year from the record in (2007) of USD 6.48 a share, but we think we can get back to those record earnings because of all the cost initiatives and marketing initiatives we have. We won’t be able to do it this fiscal year, but we hope running into (2010) we’ll be able.”
