Air traffic controllers like it when they’re busy, and the rest of us should like it when they’re busy too because planes equals dollars in our struggling aerotropolis.
On Thursday, the new 336-foot-tall, $72 million Memphis air traffic control tower will be dedicated. The Flyer got a sneak peak on Wednesday, and the first thing that struck me was (duh) how much taller the new one is than the old one right next to it.
As even their creators and honorees will admit, most of the lists that purport to rank cities are horse crap. But once in a while, one of them comes along that, like a seven-car crash, demands your attention.
Case in point: Outside magazine has named Chattanooga “the best Outside town in America” and one of the “Best Towns Ever.” Chattanooga! The decaying railroad town in the shadow of Lookout Mountain and Rock City. I have been there dozens of times over more than 50 years and was moved to congratulate Candace Davis of the Chattanooga Convention and Visitors Bureau.
“Thank you John,” she replied in an email. “I typically don’t send out mag ranks either, but we do have a list of them compiled. With this being such a great publication with national and international recognition, we thought it was definitely appropriate. I mean how often do you get to be the Best EVER??”
If you are not familiar with it, Outside features extreme sports and doesn’t give a damn about football, baseball, or golf. I like to look at the nice pictures and read the articles which remind me of so many things I either cannot or would not do, like rock climbing, hang gliding, or paddling a surfboard from a standing position like I saw people doing this year in Florida and California and Shelby Farms.
The press release says “Outside scoured the nation to find dream cities that offered a balance of great culture, perfect scenery, stress-free and reasonable cost of living, and, of course, easy access to the outdoors.” Finalists included Charleston, SC; Madison, WI; Portland, OR; Portland, ME; Santa Fe, NM; Ashland, OR; Boulder, CO; Burlington, VT; Tucson, AZ. A Facebook poll put our Tennessee neighbor over the top.
While I’m sure researchers put in long hours weighing “stress-free and reasonable cost of living” factors, the emphasis was on the visuals, just as Miss Universe must have, oh, never mind. Chattanooga, if you expand its radius 75 miles, has the goods from whitewater to mountain bluffs to the downtown river walk.
Memphis can play this game. Many of us have seen the warts in Chattanooga and the other finalists, and they are glossed over in such contests. If Shelby Farms, the riverfront, the Harahan Project, the Kroc Center, and Bass Pro work out as hoped, Memphis could and should be on someone’s list of best outdoor places.
As I wrote in this blog last week, I would pair that brag with a not-too-subtle reminder that Memphis is pretty much disaster free at a time when the rest of the country is reeling from floods, droughts, hurricanes, blizzards, forest fires, and monumental traffic jams. In today’s Wall Street Journal there is a story about a bridge closing on Interstate 64 in Louisville (one of our peer cities) that has “doubled commuting times for thousands” and backed up traffic for six miles in Indiana. UPS, Humana, and the University of Louisville are in scramble mode. Sorry, guys, FedEx is running like clockwork.
In the same newspaper, I read that Texas set a record as the temperature hit 100 degrees for the 70th day this year. The state is parched. Tennessee, and Memphis, are mostly green, and we are the Saudi princes of water.
If I were selling Memphis I would point that out. If it’s good enough for FedEx, maybe it’s good enough for you, etc. etc. If you like to bike, skate, run, fish, or paddle, come check us out.
Nobody said contests were fair and balanced.
If the presidency of the United States weren’t closed to captains of industry, the Republicans and Democrats would be calling upon the services of someone whose experience trumps all of the recent candidates, FedEx founder Fred Smith.
He has been speaking out quite a lot recently. There was a long interview in The Wall Street Journal last Saturday, a full-page Journal ad/manifesto on energy called “The Unshaken Pillar,” signed by Smith and three other CEOs, interviews with Charlie Rose and The New York Times and, locally, with Mike Fleming and MBQ magazine.
Along with some wishful thinking by various Republicans, this fueled speculation that Smith might be John McCain’s running mate or serve in his cabinet if McCain is elected. It reached the point that FedEx finally issued a formal statement that Smith is staying put and is not interested in public office.
He has his reasons. But you can’t blame people for trying.
The issues are jobs, energy, national security, America at war, the global economy, health care, taxes, and leadership. Recall, if you can, what McCain and Obama and Palin and Biden said in the debates. The presidency, we’ve heard, is about judgment, not experience. But judgment should be forged by experience. Whether you agree with him or not — and some people don’t, judging by the comments and blog posts on his most recent interview — Smith speaks from experience. When the campaign ends and the clean-up begins next year, his influence will be valuable to whichever party takes the White House and Congress.
Jobs? FedEx created 300,000 of them since 1973.
Energy? More planes and vehicles than most countries.
National security? Millions of sensitive shipments every day.
War? Smith served two tours in Vietnam with the Marines.
Global economy? FedEx has service to more than 200 countries.
Health care and benefits? See: Memphis Hub.
Taxes? Annual revenues of $38 billion.
Stock market slump? With 19.8 million shares of FedEx, Smith has lost, on paper, a cool billion since 2006, when the stock was at $115.
Political hardball? FedEx is among the annual leaders in PAC donations.
Joe Sixpack? The FedEx brand is on race cars in North Carolina, badminton players in Beijing, football in Washington, D.C., and basketball in Memphis.
Trial by fire? A platoon in Vietnam, airline deregulation, media adulation and criticism, corporate acquisitions, union votes, losing and replacing top talent, 9/11, dealing with every president since Jimmy Carter, and the logistics of overnight delivery in seriously bad weather, to name a few.
If this isn’t job training for the presidency, then what is?
Our choice next week is between a politician six years removed from the Illinois Senate and a 72-year-old senator whose running mate could not advance to the second round of Jeopardy. Maybe you think McCain is running eight years too late or Obama eight years too early, but with McCain/Palin, Obama/Biden, Kerry/Edwards, or Bush/Cheney, we’re not getting our best leaders on the ballot or on the field.
The indignities, privacy invasions, and duration of the campaign have limited the modern presidency to the most driven members of the political class. As a reporter, I sometimes thought it would be easier to pin Smith to a wrestling mat than to get him to pose for a photograph. After having his picture taken for MBQ, he asked that we consider not using it on the cover. Since its founding, FedEx, fully aware of the needs of the media to personalize complicated stories, has emphasized the team, not the top.
I once asked Smith if he could run General Motors. (He said yes.) This was after Michael Moore’s 1989 movie, Roger and Me, about GM CEO Roger Smith came out. The industrial titan was showing cracks, but it was still a titan. Now the question seems funny. I was looking backward, not forward. If GM is in a headline today it is probably next to the words “losses mount,” “job cuts,” “federal aid,” or “possible bankruptcy.” The market capitalization of FedEx is now five times as much as GM.
In the MBQ interview, Smith said globalization, contrary to political demagoguery, has been the main engine of economic growth in the U.S. for the past 25 years. “The problem,” he said, “is that the benefits of global trade are very diffused and the pain is very localized.”
Except in Memphis, where the benefits are very localized. When it comes to leadership, our gain is America’s loss.
It’s the economy.
The grimmest economic picture in at least 30 years underlies school funding, property taxes, suburban flight, Grizzlies attendance, aerotropolis, stable neighborhoods, and the tenuous position of Memphis as a major-league city.
Mayor Herenton blasted the media for mistreating him and Joseph Lee, but the media should be blasted for obsessing over Herenton and the NBA draft while tip-toeing around a bigger story.
The stats of O. J. Mayo and Kevin Love and Mike Miller, the odds of the Grizzlies getting the first or second pick, the relative merits of the fifth pick and the 28th pick — we were bombarded with this stuff for three weeks on television and in the daily paper, culminating in Thursday’s NBA draft.
Does anyone honestly think 14,000 people are regularly going to show up 41 times this season to watch the Grizzlies? When Peabody Place is getting out of retail and entertainment? When the Redbirds are struggling to sell $7 tickets? When uncompleted Memphis subdivisions are selling for pennies on the dollar? When the very survival of Ford, General Motors, Morgan Keegan, and First Horizon as we have known them is in question? And we’re talking about the injustice of Chris Douglas Roberts going in the second round and not getting a guaranteed contract?
Here are the stats that matter. Oil $140 a barrel. Gasoline, $4 a gallon. FedEx stock $78, down from $119 a year ago. First Horizon $7.50, down from $39. Regions Financial $11, down from $35. Suntrust Banks $37, down from $90. International Paper $23, down from $41. Northwest Airlines $6, down from $24. Pinnacle Airlines $3, down from $20.
General Motors, once the symbol of American industrial might, is $11, down from $43. Its stock market value is $6.5 billion. Some American businessmen are worth more than that.
Those companies have a big Memphis and Tennessee presence, and thousands of their employees have lost their savings and some of them will lose their jobs and we’re supposed to worry about a basketball team?
Reporters and sports executives act like the sports world and the business world are in separate universes. In the 1970s, an NBA player was doing well to make $200,000. The NBA salary structure that pays Pau Gasol $14 million and Brian Cardinal $7 million for a season is as unsustainable as the $40,000 SUV or the third shift at Ford and GM or the $120 round-trip ticket on Northwest. Business cuts jobs and wages and closes plants or cuts services. The NBA and the Grizzlies tweak their marketing campaigns.
Watch the bottom fall out of the sports and entertainment market in 2009. Last season, a Grizzlies crowd of 11,000 was alarming. This season, 11,000 could be encouraging. Watch a couple of the Tunica casinos closely. Watch expensive restaurants close. Watch for some private schools to close. Watch for more malls to close. Watch for a surge in free, neighborhood-based entertainment like the upcoming concert series this fall at the renovated Overton Park Shell. The easiest way to save money is to cut out $40 tickets, unnecessary driving, and $7 drinks.
And watch for city and county government to make hundreds as opposed to scores of layoffs in 2009, when state and federal funds dry up and homeowners get their new property reappraisals that reflect the decline of 25 percent or more in the value of their homes. And if they don’t get a reduction, watch for a stampede to the assessor’s office and the board of adjustment by homeowners and businesses making appeals.
In all the commotion and outrage over Joseph Lee, it seems something is being overlooked. The former president of MLGW could have spared himself a lot of grief by having a conversation with former City Councilman Edmund Ford that went something like this:
“Councilman, you’re behind on your electric bill. You’ve been behind for a while. You’re putting me, the board, and this company in a bad spot. I needed council approval to get this job. I needed your support as chairman, especially. I appreciate that, but you’re testing my patience.
“Here’s the deal. If this bill isn’t paid within a week, I’m going to have a press conference. I’m going to bring your utility bills, and I’m going to explain exactly what I am doing and why I am doing it so there won’t be any misunderstanding or, heaven forbid, charges of wrongdoing.
“This looks fishy. Anyone can see that. So I’m not just going to cover my butt, I’m going to do it before somebody else tries to get me in a jam.
“The choice is yours. Pay up, or I go public. If it makes you look like a deadbeat, that’s your problem. You can join me at the press conference if you want to go that route, but we’re not going to hide anything. See you.”
Federal prosecutors in Memphis did what they had to do in dismissing their case against Lee and Ford. Prosecutors are not supposed to bring a case unless they think they can win it at trial. After Ford was acquitted by a jury — even though the jury watched videotapes of Ford taking payments from Joe Cooper — it was extremely unlikely that a jury would convict Ford and Lee. That doesn’t mean they didn’t think they had a case.
Interesting item in The Wall Street Journal this week. FedEx was named as one of three companies that are “baring their claws” during tough times and aggressively going after greater market share at the expense of their weaker competitors. In other words, the strong shall survive. Maybe in five years we’ll see 2008 as a pivotal year for FedEx, in a good way.
There’s reason for long-term optimism about the Northwest-Delta merger and Memphis International Airport as well. Delta CEO Richard Anderson seemed genuine when speaking about keeping the Memphis hub, albeit in a reduced capacity. He restated his optimism about the merger in national newspapers last week. And, for what it’s worth, he carried his own luggage to his car after speaking at a Memphis Chamber of Commerce event a couple weeks ago.
From MarketWatch.com: FedEx Corp. said Wednesday that it swung to a fourth-fiscal-quarter loss from a year-earlier profit, reflecting a $696 million after-tax asset-impairment charge tied to the acquisition of Kinko’s, as well as a surge in fuel prices and a weak U.S. economy.
The Memphis-based shipping business, sometimes viewed as a bellwether for the broader economy, also provided a first-quarter and fiscal 2009 outlook that were below Wall Street’s earlier expectations. That helped to send shares down nearly 3 percent.
Read the rest of the bad news at MarketWatch.com.
In a bad sign for Memphis and the U.S. economy, FedEx today reported lower quarterly earnings than a year ago.
“High fuel prices and weak U.S. economic growth year over year have impacted our business,” said Frederick W. Smith, FedEx chairman, president, and CEO. “We continue to benefit from solid international growth, which helps mitigate softness in U.S. industrial production. While we see challenging near-term economic trends, we remain confident about long-term prospects in all our business segments.”
The company earned $1.54 per share for the second quarter ended November 30th, compared to $1.64 per share a year ago.
Revenue was $9.45 billion, up 6 percent from the previous year. Operating income of $783 million was down 7 percent, net income of $479 million was down 6 percent, and operating margin of 8.3 percent was down from 9.4 percent.
Total combined average daily package volume in the FedEx Express and FedEx Ground segments grew 8 percent year over year for the quarter, due to growh in ground and international priority shipments.
For the third quarter, FedEx expects earning to be $1.15 to $1.30 per share, compared to $1.35 per share a year ago. The capital spending forecast has been reduced from $3.5 billion to $3.1 billion, “with additional reductions possible as management continues to review the timing of capital outlays,” the company said in a press release.
Following the announcement of earnings, FedEx stock was lower on Thursday by just over $1 to $93 a share, which is near its 52-week low of $91.
–John Branston
ABC News has a nice piece online today about FedEx’s biggest night, coming up later this week.
Here’s a sample: You think Santa has a hard job delivering millions of packages on a single night? Well, he only does it once a year. FedEx does it every day.
FedEx is constantly moving packages around the world. At any given moment a container of fresh fish from Japan might be heading to a sushi restaurant in New York while a crate of car parts from Detroit travels to a mechanic in Houston.
Getting millions of packages from point A to point B — and having them arrive on time — is a mammoth challenge on the quietest of days. But no day compares to today, when those items are moving across the planet in addition to all of your Christmas gifts. It is expected to be the busiest shipping day in FedEx’s history …
Read it here.
Upon news that FedEx cut its earning expectations for the year, shares of the company sank almost 5 percent during morning trading [Friday].
The company, citing rising fuel costs, said that earnings per individual shares would be 20 cents lower than previously expected. Analysts had forecast an earning of $1.60 to $1.75 per share for the second quarter ending November 30th. Now FedEx expects to earn $1.45 to $1.55 per share.
Since September, the company’s fuel costs have risen more than 8 percent, roughly $85 million. A FedEx spokesman said that the company would be taking steps to reduce expenses and is reviewing its capital investment plans.
Former Shelby County commissioner Bruce Thompson was indicted Tuesday by a federal grand jury on four charges connected to his work as a consultant to a Jackson, Tennessee construction company.
The indictment was announced at a press conference by United States Attorney David Kustoff and FBI Special Agent in Charge My Harrison.
“What can I say? What can I possibly say?” said Harrison. “Same game, different name.”
Harrison warned that public officials who think they are “entitled” to more than their salary are on the FBI’s watch list.
“Whether you’re north, south, east, or west we’re watching,” she said.
The investigation of school construction contracts is ongoing, Kustoff said. A grand jury has been hearing testimony about campaign contributions and other matters. According to the indictment, Thompson did not actually have the power to influence votes on the Memphis school board but “falsely represented” to H&M Construction and its joint-venture partner Salton-Fox Construction that he could help them win a contract to build three city schools. The commission appropriates money to fund schools in Shelby County, including the Memphis City School system.
The indictment says Thompson, 48, received $263,992 from H&M in two payments in 2005 after the school board awarded the firm the contract, reversing a previous vote that gave the contract to another firm. The indictment says that Thompson “did cause to be placed a check in the amount of $7,000 addressed to Kirby Salton from H&M Construction in the custody of an interstate common carrier” on November 16, 2004. That is the technical description of a mail-fraud charge.
Both the wording of the indictment and Kustoff’s remarks, however, left it unclear whether the $7,000 was passed on to board members and exactly what Thompson was supposed to do for his $263,992, which is nearly nine times the annual salary of a county commissioner.
“Thompson would falsely represent to representatives of the joint venture that by reason of his position as a Shelby County commissioner he had the ability to control the votes of members of the Memphis City School Board in connection with the awarding of a contract to construct three schools,” the indictment says.
Thompson, a white Republican from East Memphis, was a commissioner from 2002-2006 when he decided not to seek another term. His name came up in the Tennessee Waltz investigation when FBI agents posing as executives of E-Cycle Management said they wanted to meet him. The first Tennessee Waltz indictments were made public in May of 2005, putting public officials on notice to be careful about their business dealings, especially with regard to consulting. Thompson’s contacts with H&M regarding the three school construction jobs began in 2004, according to the indictment.
Thompson initial court appearance is scheduled for Wednesday.
From CNN.com — Air traffic controllers were forced to use their personal cell phones to reroute hundreds of flights Tuesday after the Federal Aviation Administration’s Memphis Center lost radar and telephone service for more than two hours, snarling air traffic in the middle of the nation.
The FAA’s Memphis Center lost communication service Tuesday, affecting FedEx flights and others.
A spokesman for FedEx, which has its hub in Memphis, Tennessee, said the package delivery company had diverted 11 aircraft to other cities. But most of its flights take off and land after 10 p.m., so FedEx expected the impact to be minimal, the spokesman said.
Air traffic was halted at 12:35 p.m. ET when a major communication line that feeds all the telephones at the FAA’s Memphis Center failed, said FAA spokeswoman Kathleen Bergen.
Service was restored at 3 p.m.
Read the whole story.
