Crediting federal tax reforms, UPS announced on Thursday that it will invest more than $12 billion in its Smart Logistics Network, including $5 billion in contributions to company pension plans and $7 billion in capital projects over the next three years.
UPS had planned to spend up to 7 percent of annual revenue on capital investments, but the company said it would increase investments in response to federal tax reform. Facility construction and renovation, new aircraft and ground fleet vehicles, and information technology improvements are all planned
“This $12 billion investment program is an outgrowth of the opportunity for tax savings created by the Tax and Jobs Act,” David Abney, chairman and CEO of UPS, said. “We will increase network investments and accelerate pension funding to strengthen the company for the long term so that we maximize the benefit to our global customers, employees, and shareowners.”
The company’s voluntary $5 billion of tax-qualified contributions to three company-sponsored pension plans will amount to approximately $13,000 per participant. The contributions will bring the company’s funding level above 90 percent.
“We applaud President Trump and Congress for their bold action to improve the U.S. economy,” Abney said. “Our investments will create new jobs, secure existing jobs and expand opportunities for our people. We are committed to remaining a preferred employer by continuing to provide industry-leading compensation and excellent career opportunities.”