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Old 03-24-2009, 10:32 AM   #1  
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Default FedEx playing hardball with Congress

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.
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Old 03-24-2009, 10:57 AM   #2  
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If Congress caves in to the FedEx threat, then our elected leaders are as weak as some of our ALPA leaders (re: 4000 Irish pilots in 1998). Would we go back to the A380 and get our highly touted super-wide body pay? You have got to love how FedEx acts!!!!
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Old 03-24-2009, 11:42 AM   #3  
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I guess the next posting will be 09-03, Fred's buying A-330's and A-340's.
B-777 bid will be cancelled..................
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Old 03-24-2009, 01:00 PM   #4  
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As long as the replacement planes have main gear that won't collapse, I guess I should be happy I still have a job.
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Old 03-24-2009, 01:39 PM   #5  
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Originally Posted by Rambler View Post
You have got to love how FedEx acts!!!!
Are you kidding me? Can you name a single person in Congress (OK - name 10 of them) that does anything for the good of the country rather than for the good of themselves and their own power. That place is the Major Leagues of politicization - all they do is politics. If there is no political gain, they won't do it - they won't even vote for a good bill unless they can attach a rider or get a promise of a future vote for a pet project of theirs. It is disgusting.

And you complain because FedEx is using political pressure for results from a purely political body! I guess you will also slam how Wal-Mart uses pressure to control supplier prices - suppliers who actively petition to become suppliers. When you have the ability to buy 777's over the next 15 years (no small task), you use that ability to maintain an environment where you can continue to maintain that ability. It is called business.

By the way, we all know that the other side of the Card Check Bill is not using politics for their purposes. Those commercials that I have seen have been so objective.
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Old 03-24-2009, 01:50 PM   #6  
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You mean congress isn't mandating the change because it is the "right thing to do"? Next your going to say UPS hasn't talked to the pols in their pocket.
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Old 03-24-2009, 01:58 PM   #7  
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It's just politics. Besides, fedex has to keep up with ups. They have that dude with the 80's mullet lobbying congress with a whiteboard and brown markers.
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Old 03-24-2009, 02:01 PM   #8  
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I call BS. Everyone knows they're just gonna buy from whomever gives them the best deal. It doesn't matter what Congress does.
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Old 03-24-2009, 02:01 PM   #9  
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Yes, I will slam Wal-Mart. Demanding suppliers meet or beat "the China Price" makes me sick.
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Old 03-24-2009, 02:04 PM   #10  
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Originally Posted by MD11HOG View Post
Yes, I will slam Wal-Mart. Demanding suppliers meet or beat "the China Price" makes me sick.
I'll bet the car dealers love you. They dont have to pretend to sell you the undercoating. I can see it now: Keep the rebate, make sure part of it goes to the UAW retirement fund.
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