I say let them cancel their order for 777s and we'll be glad to take them ...
$10 billion threat: FedEx warns lawmakers over union legislation : fdx : Memphis Commercial Appeal
$10 billion threat: FedEx warns lawmakers over union legislation
By Wayne Risher (Contact), Memphis Commercial Appeal
Originally published 11:13 a.m., March 24, 2009
Updated 11:14 a.m., March 24, 2009
FedEx could cancel contracts for $10 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, the Memphis-based company disclosed that purchases of Boeing 777s are contingent on FedEx Express' continued coverage by the National Railway Labor Act.
The disclosure serves as a warning shot to lawmakers seeking to put FedEx Express workers under the National Labor Relations Act, a move seen as helping the International Brotherhood of Teamsters.
"It's FedEx political hardball at its finest," said analyst Donald Broughton with Avondale Partners. In a research note Monday, he 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."
GE makes engines for the Boeing
It raises the possibility that FedEx could buy French-made Airbuses to fulfill plans to upgrade its fleet with more fuel-efficient trans-oceanic cargo carriers.
FedEx in January announced it had renegotiated a deal to buy 777 Freighters from Boeing over the next decade. The company increased its order to 30 planes from 15 and agreed on an option for another 15 planes.
The labor-related cancellation provision came to light in FedEx's filing on third quarter earnings. "Our obligation to purchase these additional aircraft is conditioned upon there being no event that causes FedEx or its employees not to be covered by the Railway Labor Act."
The proposed change in labor coverage is contained in a reauthorization of the Federal Aviation Administration. The bill has cleared the House Transportation and Infrastructure Committee but hasn't gotten to a vote of the full House. It's unrelated to the Employee Free Choice Act, another pro-organized labor measure making its way through Congress.
Under the Railway Labor Act, a union like the Teamsters would have to organize FedEx Express employees nationally, rather than in local bargaining units. Drivers for FedEx's chief domestic competitor, UPS, are largely represented by the Teamsters, but FedEx has fended off organizing attempts for years.