MAKING THE CASE FOR ASIAONE

MAKING THE CASE FOR ASIAONE

When Federal Express Chairman Frederick W. Smith tapped Joseph C. McCarty to run the carrier's Asian operations four years ago, the move stirred some controversy within the company, Mr. McCarty recalls. After all, he was a lawyer with no direct operational experience, although he had been vice president of properties and facilities from 1984 to 1987.

As senior vice president for Asia and the Pacific, Mr. McCarty is responsible for all operations, sales, marketing and strategic planning in the region.He's also been the point man for AsiaOne, FedEx's new intra-Asia network, a task that has drawn extensively on his properties experience. That was particularly so with the negotiations that led to the Sept. 4 opening of FedEx's new hub at Subic Bay in the Philippines.

But Mr. McCarty said his legal background has been even more helpful, especially in helping him cope with the myriad of laws and regulations that FedEx faced as it sought to obtain landing rights and other approvals required to make AsiaOne viable.

"This is probably the most heavily regulated industry in the world," he said.

While Subic Bay just opened, FedEx already is planning a second regional hub, in Taipei, pending approval by Taiwanese authorities. That prompted Mr. McCarty to join the board of the USA-ROC Economic Council, a private group representing U.S. business interests in Taiwan.

"He's a no-nonsense guy. He's very quick and incisive. He likes board meetings to deal with substance," said David Laux, the council's president.

Mr. McCarty joined FedEx in 1983 as vice president-legal, serving as legal counsel for Zapmail, the carrier's ill-fated response to the fax revolution, a project that ended up costing FedEx some $358 million.

"I did most of the negotiations with the Japanese vendors and suppliers of the system," he said. The plan called for FedEx to distribute faxes produced on machines offering much clearer resolution than ordinary faxes.

Mr. McCarty also worked at the time on FedEx's initial foray into the international market, primarily Canada and the United Kingdom.

His promotion to the properties assignment the following year came at a time when FedEx was growing 20 percent to 30 percent annually in the United States. Opening dozens of new stations around the country was necessary to support the growth of that business.

"We somewhat systemized property development for the company. I look on that as one of the best times, other than being in Asia, that I've had for FedEx," he recalled.

Mr. McCarty was no stranger to property-related issues when he took on that assignment. Much of his time with the Memphis law firm Waring Cox, which he joined fresh out of law school in 1971, had been devoted to such matters, as well as aircraft acquisitions and financing.

A native of Jackson, Miss., who grew up there and in Chicago, Mr. McCarty received his bachelor's degree in liberal arts from the University of Mississippi in 1966. He then entered the U.S. Army, where he served as lieutenant and air operations officer in Vietnam some 60 miles north of Saigon, now known officially as Ho Chi Minh City. Mr. Smith, FedEx's founder, served as an officer in Vietnam at the same time, although the two men did not know each other then.

FedEx does not fly into Vietnam, but serves the country by shipping packages on passenger airlines. It has a country manager and a representative office but relies on the local postal authorities in Hanoi and Ho Chi Minh for pickups and deliveries.

Now that he's gotten AsiaOne off the ground, Mr. McCarty said he anticipates moving on to another job with the company in the next six months to a year, noting that his initial assignment in Asia was for three years.

When he does move on, he'll likely be rewarded with a first-rate job, given the praise he wins from Mr. Smith.

"Joe McCarty is an outstanding corporate executive and leader. He has contributed greatly to FedEx's growth and success, particularly in recent years as head of our Asian and Pacific operations," Mr. Smith said.

Mr. McCarty, who resides in Hong Kong, spends about 80 percent of his time in Asia, with the rest in Memphis.

"It's been a difficult personal assignment for me because I've had to travel back and forth far more than I thought," he said, noting that this was the first time FedEx has decentralized its senior management team. To stay engaged with other senior executives, he had to go back and forth frequently. He's also traveled back many times for meetings with customers.

Mr. McCarty said he probably suffers less from jet lag than most people, but adds, "It still takes at least a day at each end to reset my clock. My wife is very accustomed to me watching CNN at 3 a.m. no matter where I am."