Friday, 22 June, 2018

FedEx plans $1.5 billion investment over 7 years to expand Indy plant

Reuters Reuters
Nellie Chapman | 27 January, 2018, 22:13

FedEx said on Friday it will spend more than $3.2 billion on wage increases, bonuses, pension funding and capital investment, taking advantage of the tax overhaul signed into law in December.

The FedEx Corporation (NYSE:FDX) is the most recent amongmore than 260 companies that announced using the recently enacted federal tax cut to give its employees bonuses or wage raises, as well as investing a portion of the funds to expand the business.

United States delivery firm FedEx is to spend more than $3.2bn on boosting wages, pensions and capital investment as a result of president Trump's tax reforms. Others include Disney, Apple, Walmart and AT&T.

US -based package courier FedEx is the latest to join the list. That said, it intends to increase employee compensation by more than $200 million, about two-thirds of which will go to hourly employees by moving annual pay increases up by six months. It will also increase performance-based pay for salaried workers. The 2 million-square-foot Indianapolis location employs about 700 full-time and 3,000 part-time workers, The Indianapolis Star reported.

The company also will make a $1.5 billion voluntary contribution to its pension plan, which will help ensure that FedEx retains its status of providing one of the best-funded corporate plans in the United States. FedEx said in a press release that it expects the tax reform legislation will not only accomplish that goal, but that it will also strengthen U.S. GDP growth.

The FedEx share price had fallen 1.9% to $266.15 by midday in NY following the announcement.