This is a huge step for big brown and for the most part you can bet the execution of this plan has been carefully considered. For the most part we can all sit back, arm-chair quarterback and second guess the new restructuring plan. However, this is not change for the sake of change....this is strategic change for the longterm livelihood of the entire organization...hourly and management!
The reality is that our organization has to change with the times. At this point, I know my job has been eliminated and I may or may not have a new assignment in 5 months. However, the driving factor of this change in our business is that our stock is literally worth less than it was in 1999. Taking in account inflation, the lack of stock growth and the shrinkage of profits, we have to make significant changes.
For the past 3 plus years management has heard the message that UPS is and will transition from a paternalistic "take care of the partners" environment to a performance driven environment. (remember the Enterprise Strategy presentations!) Well, we are there; we are emerging as a performance driven organization.
Our Mgmt committee and Board are in an difficult position. They are making decisions that are completely contrary to their UPS upbringing. As a result of our pre-1999 partnership culture, many of them have been made wealthy and successful far beyond their furthest imagination. At that time, loyalty to the partnership was tantamount. I can recall the days of missing vacations, graduations, births, funerals, recitals, etc. in the name of the "partnership". Unfortunately, for all partners (including those investors referred to as "the market"), our mgmt committee and board have made the decision that they feel will move our stock in the right direction.
Yes, some naysayers will say that I've drank too much of the KOOLAID, but investor confidence, stock price, and profits will eventually dwindle to the point that our only net worth will be properties and proprietary assets. Then what...the elimination of 1800 jobs will pale compared to what the future could hold.
In closing, the only downside to this is it looks like the retirement age and our retirement pension plan for thos under 50 will be changing. This is my one frustration....based on current calculations, my 25 years of service don't seem to have much worth!
When I went into mgmt, there was strong assurity that I would have a solid retirement with UPS stock at a 12% annual return, the Thrift plan and my retirement pension. As a result, we will all have to work longer, be more responsible for our financial future, and come to accept the realities of the real business world.
If you want to know what is really valuable, read John Piper's "Don't waste your life". He has a great perspective on this thing we call retirement!
