No plans to leave in near future: FedEx CEO Fred Smith
FedEx CEO Fred Smith told CNBC he doesn't plan on leaving the company in the near future, despite activist hedge fund manager Dan Loeb's recent emergence as a major shareholder in the company.
"Well the clock ticks on," Smith said on "Squawk Box" on Friday. "We are mortal, but I don't plan on going anyplace in the near future."
Loeb, who is known for writing acerbic letters to CEOs of companies in which he invests, revealed earlier this week that he bought a large stake in FedEx and met with Smith last week.
In an interview at The New York Times' DealBook conference and aired on CNBC, Loeb said he didn't plan to write one of his trademark letters to FedEx's CEO any time soon.
Smith said the meeting with Loeb was no different than his meetings with regular shareholders.
Smith said he was "flattered" that Loeb took the position in his company.
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"We said it was great," Smith said. "We meet with shareholders all the time. There was nothing unusual about that. [Loeb] is always looking for an opportunity in an undervalued company, and in some cases, he thinks they are undervalued because management didn't do the right thing."
According to SEC documents filed Thursday, Loeb's hedge bought 2 million shares of FedEx during the third quarter
Two other well-known hedge fund managers also recently took out large positions in FedEx, the Times reported Thursday: George Soros' hedge fund bought 1.5 million shares and call options worth an additional 375,000 shares, and John Paulson's fund took out a stake worth 648,000 shares.
Turning to his forecasts for the busy holiday shipping season, Smith said FedEx plans to hire an extra 20,000 people to help deal with volume caused by traditional shopping days like Black Friday, but now also Cyber Monday on Dec. 2.
"We project our peak day to be Cyber Monday," Smith said. "The peak shopping day is a little different this year because the time is compressed between Thanksgiving and Christmas.
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Smith predicted a strong holiday season for his company, with 10-11 percent growth in shipments to 22 million on Cyber Monday. He added that the company plans to make 85 million shipments that week, about a 13 percent increase from the past year.
Despite the strong forecasts, Smith expressed doubts about the national economy.
"The economy is not strong," Smith said. "It is not strong because we don't have pro-growth policies in terms of taxes and trade and the centerpiece of that is reforming the tax code to incentive more business investment."
Like global shipping, garbage is another industry whose performance can be considered an economic indicator, since everything from large-scale construction to small stores generate more trash when business picks up. Waste Management Inc. CEO David Steiner told CNBC on Friday that business leaders are preparing their strategies for a long period of slow growth.
"When you have the sharp economic downturn, everyone reacted in the same way—pull your horns back and do nothing," Steiner said on "Squawk Box." "And now the economy has come back, but it hasn't come back enough to where I think any CEO would say, 'Well, let's go out and spend a lot of money, waiting for the flood of big business to come.'"
Echoing Smith, Steiner said the only way the federal government could effectively spur GDP growth would be through corporate tax reform.
"The way you break out of that cycle is to get a little help from the government," Steiner said.