$6.7 billion threat: FedEx warns lawmakers over union legislation

Memphis Commercial Appeal ^ | 3/27/9 | Wayne Risher

[SmithL]

FedEx could cancel contracts for $6.7 billion in American-made planes if Congress makes it easier for unions to organize the delivery giant's workers.

In a Securities and Exchange Commission filing on Friday, the Memphis-based delivery company disclosed that future commitments to buy Boeing 777s are contingent on FedEx Express' continued coverage by the Railway Labor Act.

The disclosure serves as a warning to lawmakers seeking to put FedEx Express workers under the National Labor Relations Act, a move seen as helping the International Brotherhood of Teamsters and rival UPS.

"It's FedEx political hardball at its finest," said analyst Donald Broughton of Avondale Partners in St. Louis.

In a research note Monday, Broughton wrote: "We see FedEx's action as a deft political move that aligns the interests of Boeing and GE with FedEx, and pits the interests of the Teamsters against the interests of the machinist and several other trade unions."

Added U.S. Rep. Steve Cohen, D-Memphis, "It just shows how committed Fred Smith and FedEx are to remaining under the Railway Labor Act. That's a pretty strong shot at the Teamsters, who are a pretty strong force on the other side, as well as UPS. It's a shot across the bow."

Cohen was one of the dissenting members of the House Committee on Transportation and Infrastructure when it approved the labor provision as part of a Federal Aviation Administration reauthorization bill. Cohen said the bill hadn't been scheduled yet for action in the full House or Senate.

"We're not threatening Congress," said FedEx spokesman...

He added that if Congress targets FedEx Express to boost the company's chief competitor, "then we would have to take decisive action. (The change) could cause extraordinary upheaval. We will not be able to make large-scale investments like purchases of airplanes, if we can't use them."

[EGPWS]

FedEx could cancel contracts for $6.7 billion in American-made planes if Congress makes it easier for unions to organize the delivery giant's workers.

FedEx, when Obama absolutely, positively has to pay off the unions tomorrow.

[inkdude]

I think FedEx ought to use some of their clout and get the Tennessee legislature to make laws to protect them from card check. If the legislature does it first then they have article 10 grounds to keep the fight going and keep one of the largest employeers in business.

[bamahead]

Here’s a company that’s ripe to be declared ‘in trouble/too big to fail’, and taken over by Geithner....

And on the other hand you have the USPS, which is hemmoraging cash due to a failed businss model of delivering paper spam. From the Gov'ts perspective, it would make sense to assimilate and unionize FedEx to add it's profitable infrastructure to the collective...and kill two birds with one stone. I would not put anything past this administration.

[Hop A Long Cassidy]

>>>would you rather have FedEx purchasing from union infested Boeing or Euro-trash Airbus?

Fed Ex must not see the situation as an EITHER-OR trap.

Perhaps they see other options like using smaller Brazilian airplanes... or shutting down. They lose nothing/little with their threat. Who is going to be buying Boeing planes in the next 6 months anyway?

[businessprofessor]

I think FedEx ought to use some of their clout and get the Tennessee legislature to make laws to protect them from card check. If the legislature does it first then they have article 10 grounds to keep the fight going and keep one of the largest employeers in business.

Unfortunately your suggestion will not work. Besides card check, the rats have threatened to eliminate the exemption in federal labor law that allows states to enact right to work laws.

[kulot]

I work with Fedex. The fleet narrow body replacement is with Refurbished 757’s. That’s in progress. This is in regards to new widebodies, e.g. Boeing 777-s, which wouldn’t be bought from anyone, certainly not as early as planned.

[mojitojoe]

Unions will cause the demise of this country.

[itsahoot]

Here’s a company that’s ripe to be declared ‘in trouble/too big to fail’, and taken over by Geithner....

Maybe he could use this power to take over the Postal Service? Oh nevermind.....

[Valentine_W]

I don’t see how the government should be able to force a business into organized labor. FedEx needs to keep playing hardball.