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The C.E.O. of UPS on Voting Rights and Vaccine Delivery: corner officeThe C.E.O. of UPS on Voting Rights and Vaccine Delivery: corner officeGelles, David.New York Times (Online), New York: New York Times Company.Carol Tomé had retired. After more than two decades working at Home Depot, where she rose to become chief financial officer, Ms. Tomé stepped down in 2019 and settled into the kind of postprofessional existence enjoyed by very well-compensated executives. There was a family office, a family foundation and a 600-acre farm in north Georgia. Then Ms. Tomé got the call. UPS, where she had been a board member since 2003, needed a new chief executive. Her fellow UPS board members, unbeknownst to her, decided that she was the best fit. Would she be interested? Ms. Tomé was intrigued. After decades of nonstop work, retirement was seeming, well, quiet. But what would her husband of 37 years think? “He was like: ‘Oh, I’m so glad you asked. Would you please go back to work?’” she recalled. “‘You are driving me crazy.’” In March 2020, UPS announced that Ms. Tomé would take over a few months later, replacing the longtime chief executive, David Abney. The world was just beginning to grind to a halt. As the pandemic tore through the economy, UPS scrambled to adjust to the new reality. Workers had to be kept safe, and before long, uncertainty gave way to a realization that with so many people stuck at home, the delivery business was about to go gangbusters. In addition to grappling with a surge in volume during her first year in charge, Ms. Tomé has had to deal with UPS’s approach to the divisive voting legislation in Georgia, where the company is based; the logistics of shipping coronavirus vaccines; and a labor shortage that is stretching her work force. This interview was condensed and edited. Why did you come out of retirement to take this job? I’m out at my farm, and I’m like: “Carol, stop for a moment and think about this. Why would I do this?” I’m like: “Well, there are a few reasons. First, I love to develop people. Second, I love to create value, and the UPS stock price has been flat for about six years.” How is the labor shortage playing out at a company like UPS right now? Do you think this is the result of low wages or high government benefits? This is what I do know. There was a step change in e-commerce demand because of Covid. So we saw unprecedented volume last year, levels that we had projected would happen in 2023. That meant jobs needed to be created to handle the demand. In the second quarter of 2020, we hired 40,000 people. Now there is a need for jobs in the labor pool from which we pull — hourly workers, college students, many single parents working maybe two jobs. The population that we’ve been pulling from has gotten pulled. So it’s tight. And, oh, by the way, many of those people could be incentivized through government stimulus programs to sit at home and not take a job. They have choices, and those choices could be “I could work in a UPS sorting center, or I could go work in a restaurant, as well as maybe sit this one out until that money runs out, and then I can come back into the work force.” Are the wages you pay your lowest-paid employees enough to get by in this country today? We’re way over what you might think we’re paying, because there’s a labor shortage in the country, and wages are up. Also it’s not just wages. We’re a Teamster shop here, so the majority of our people are covered by some sort of collective bargaining agreement. They have very rich benefits. So we’ve got to look at the total package, not just the wage, to understand the value that UPS jobs create in this country. But do you feel confident that the lowest-paid people in the company are being compensated enough to get by comfortably in the markets where they live? Well, it’s a really fair question, or an interesting question, I should say, because no one is ever happy with their compensation. So when we look at employee satisfaction scores, some of the lowest scores are on compensation, because no one is ever happy with that. But I’m not hearing stories from our people that they can’t get by. For a long time, I was sort of a Milton Friedman person: “The purpose of the corporation is to create value for the shareholder.” I’m very much now of the belief that if you take care of the needs of all stakeholders, you actually create value for the share price. And taking care of the needs of all the stakeholders includes your employees, and includes the communities in which you live. It includes climate. And it includes paying a dividend, but the dividend is just a piece of the taking care of all stakeholders. So I hope there’s no misunderstanding from what I’ve said about where my interests lie. How did you move from the Milton Friedman perspective to the stakeholder view? It’s been happening over years, but it really did start during the last recession, the housing crisis, when I was at Home Depot. I saw the power of investing in our people and really thinking of them as investments, not expenses. I saw the power of taking care of them during a time of trouble, and how committed they were to the company, and how hard they actually worked to create a great experience for the customer. It was like a flywheel. Our people were happy. Our customers were happy. The experience was great. And we were creating a lot of sales and profit, which allowed us to then return some of that to shareholders in the form of dividends. From a climate perspective, I think I’m maybe more sensitive than some because I actually grow crops. I grow corn and wheat and soybeans. So I have some sensitivity to what a warmer planet means. And, you know, I think part of my journey as just a human being is just really trying to determine my purpose. For a long time, people would ask me, “What’s your purpose?” And I’d say, “I want my tombstone to read: ‘She made a difference.’” That’s all well and good and nice. But I’ve been really thinking about it, and I’m like: “You know, that’s not really why you’re here, Carol. It’s bigger than that.” And so, you know, I’ve landed on a three-pronged purpose statement for me personally: Lead to inspire, serve to create, and give to remain. What did it take to stand up a supply chain that could transport vaccines? We’ve been in the health care logistics business for over 15 years, so we have been delivering vaccines for years. We know how to do this. But we got ahead of some of the unique demands of the Covid-19 vaccines last year, because we believed that at some point there would be vaccines needing to be shipped that would require special temperatures. So we stood up freezer farms last year. We now have three of them. We manufacture a lot of dry ice. And since we started, we have delivered more than 300 million vaccines around the world. And let me just tell you how complicated this is. Pfizer was making those vaccines in Michigan when they received the F.D.A. approval. We drove an eighteen-wheeler to their manufacturing plant, and the vaccines were loaded on to that truck. That eighteen-wheeler drove to a nearby local airport, and we loaded them onto a UPS-owned plane, and they were flown to Louisville, Ky., which is our largest air hub. When the vaccines came off the airplane, they were processed and received special labels with battery-powered sensors, so we know at all times where those packages are. They were then loaded on to feeder aircraft going to the destination cities. So let’s say the destination city was Houston. They were put on feeder aircraft, flown to Houston, put onto a package car — the same package car dropping packages at your house, by the way — but because it has a special label and we have a 24/7 command center that watches that package, we knew exactly where that package was all along the route. And that package car then took it to the dosing facility, whether that was a doctor’s office or a stadium. We do this every day, and our delivery effectiveness is 99.9 percent. How did you handle the run-up to the passage of the Georgia voting law, the calls for UPS to get more involved and then weather the storm when the law was finally signed? When it comes to politics, UPS is not red or blue. We are brown. That doesn’t mean that we don’t try to shape legislation based on our values. We came out with a statement about what we believe, and we believe it should be easier rather than harder for people to vote. And we announced specific actions that we were taking to make it easier for UPS-ers to vote. I saw how divisive our country is, because there are people on both sides. Our employees are on both sides. Our customers are on both sides. And we are right down the middle. How will UPS deal with other social and political flare-ups as they arise? How do you decide when you weigh in? I was chatting with a recently retired C.E.O. yesterday, and he was commenting on how the jobs of C.E.O.s have changed a lot, because we’re expected to be out there with comments and points of view on almost everything. For me, it’s letting our values guide our actions. Those values include respect, responsibility, integrity. So it’s letting our values guide our actions, and where we need to have a stronger voice, we’ll have one based on our values. And where we don’t, we won’t. |
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