Wednesday, December 8

‘A dark legacy’: Unions express fears about spin-off of a global logistics company | Business

The pandemic has been a boon for XPO Logistics, the transportation giant that delivers products to global companies, including Asos and Walmart retailers. It reported record revenue of $ 5bn (£ 3.6bn) last quarter as it helped ship everything from washing machines to frozen fruit around the world.

To take full advantage of the boom, the US-based multinational has just completed the process of splitting into two, with the warehouse and e-commerce arm becoming a listed separately corporation called GXO Logistics. But the road ahead does not seem to be without problems. Union leaders in the UK and US are sounding the alarm, pointing to the “dark legacy” of a corporate culture they fear will contaminate reorganized companies.

In the UK, where the company delivers about 40% of the beer consumed in British pubs, the trucking division narrowly avoided a strike last month for a below-inflation payment offer, which was then increased. While XPO accepted £ 100 million from the government’s job support scheme during the pandemic, its license workers effectively accepted a pay cut, because the plan covers 80% of wages and managers rejected requests to complete the final 20%.

Disputes were further escalated by XPO’s decision in May override shareholder objections and approve a long-term incentive award for the company’s founder, billionaire negotiator Bradley Jacobs, which could be worth up to $ 80 million.

Last week, workers met at an online seminar organized by unions on both sides of the Atlantic to discuss plans to address governance and social issues at the two sister companies.

“XPO Logistics has a dark legacy when it comes to worker issues,” said Louis Malizia, deputy director of capital strategies at the International Brotherhood of Teamsters union. “And I think that is the remainder that is reaching GXO Logistics.

“A lot of the management teams were brought in, both at the corporate level and at the actual operational levels in the warehouses. The HR philosophy, as well as the people who are implementing these HR policies and practices, have been moved from XPO to GXO. “

Jacobs, a serial entrepreneur, built XPO with a set of mergers beginning in 2011 that left the company in a good position to profit even before the pandemic accelerated the already supercharged shift to online delivery.

He now has a net worth of $ 3.6 billion, according to Forbes, and the separation is likely to add more millions to your fortune because companies are worth more separately than combined. Investors have He received one GXO share for every XPO share they held. Jacobs remains the non-executive chairman of GXO, has remained chairman and CEO of XPO, and owns just under 18% of the latter company, which is valued at nearly $ 10 billion.

XPO organizes transportation for brands like Nestlé, Nike, Ikea, Home Depot and the Morrisons, Co-op, Waitrose and Iceland supermarket chains. Before the split more than 25,000 workers they were employed by XPO in the UK. The spin-off company, GXO, has about 94,000 employees in 869 sites around the world.

But the company also has a long history of labor disputes, and its treatment of workers during the pandemic has raised concerns from unions.

They note that corporate executives were paid $ 6.4 million in bonuses in 2020, while warehouse staff at Swindon and Bellshill in Scotland had to fight the Covid outbreaks. The company was criticized for a sick pay policy which discounted the first three days of salary for any absence at Bellshill, although he noted at the time that GMB had played a full role in negotiations over the provision of sick pay.

An XPO logistics truck with silo trailer on motorway
XPO helps ship everything from washing machines to frozen fruit around the world. Photograph: Bjorn Wylezich / Alamy

Those disputes are likely to get more heated as GXO executives everything the benefits of warehouse automation and new technologies for investors. One of the UK’s iconic sites is a new facility for Nestlé in the East Midlands Gateway industrial park near Derby. Join signed an acknowledgment dealing with the company there in July, which the union said would help guard against any attempt to “reduce workers’ rights and weaken health and safety laws.”

With innovations such as robotic arms and portable scanners, GXO’s facilities are undoubtedly state-of-the-art. But unions are wary of automation being used as a means of lowering wages.

“XPO Logistics, especially in the UK, they were very guilty of bidding and winning low margin contracts, ”said Matt Draper, Unite’s National Warehouse and Drivers Officer. The union has pushed for technology deals, which ensure that any new automation is brought into the discussion with workers.

“It is about the progression from a highly manual workforce to a fully automated workforce, cutting wages, ”Draper said. “The impact of that will rub off on workers and communities.”

A GXO spokesperson said: “We have always believed that spinning off our logistics business as GXO was the most effective way to unlock significant value for all of our shareholders. For our employees, this means continuing to offer market-competitive salaries and benefits, cross-training for skill development, and career growth opportunities. We are also developing new ways to manage supply chains for our customers using the latest technology, in particular with automation that helps our team and improves safety in operations. “

Last week’s seminar builds on years of collaboration from unions representing XPO drivers and warehouse personnel in the US and Europe, who have united forces about protests, pickets and strikes. Last year, 11 unions came together to publish a report detailing allegations of controversial wage practices, poor Covid-19 responses, health and safety violations, and anti-union efforts.

Responding at the time, an XPO spokesperson rejected the claims, saying: “The report repeats totally inaccurate allegations that have been totally discredited.”

In January 2018, a U.S. judge tidy XPO Logistics to provide retroactive payments to unionized workers for raises that were denied, but given to non-union workers. XPO Logistics has paid more than $ 47 million in fines and penalties related to employee-related crimes in the US since 2000.

In the USA, only 231 of 35,000 employees at XPO Logistics they were unionized compared to Europe, where around 75% of the company’s employees are represented. The Teamsters landed their first union contracts among XPO Logistics employees a few weeks before the spin-off.

Greg Chockley, National Campaign Coordinator for the International Brotherhood of Teamsters, said: “Bradley Jacobs still runs both companies. Money flows up. “

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