Political group does a 180 on FDX for UPS
 

Exclusive: Conservative group offers support for $2M
By: Mike Allen
July 17, 2009 05:07 AM EST

The American Conservative Union asked FedEx for a check for $2 million to $3 million in return for the group’s support in a bitter legislative dispute, then the group’s chairman flipped and sided with UPS after FedEx refused to pay.

For the $2 million plus, ACU offered a range of services that included: “Producing op-eds and articles written by ACU’s Chairman David Keene and/or other members of the ACU’s board of directors. (Note that Mr. Keene writes a weekly column that appears in The Hill.)”

The conservative group’s remarkable demand — black-and-white proof of the longtime Washington practice known as “pay for play” — was contained in a private letter to FedEx , which was provided to POLITICO.

The letter exposes the practice by some political interest groups of taking stands not for reasons of pure principle, as their members and supporters might assume, but also in part because a sponsor is paying big money.

In the three-page letter asking for money on June 30, the conservative group backed FedEx. After FedEx says it rejected the offer, Keene signed onto a two-page July 15 letter backing UPS. Keene did not return a message left on his cell phone.

Maury Lane, FedEx’s director of corporate communications, said: “Clearly, the ACU shopped their beliefs and UPS bought.”

ACU's executive vice president, Dennis Whitfield, said that neither the group nor David Keene, the chairman, took any money from UPS. Whitfield said the group has never received a response to its original proposal to FedEx. He said Keene endorsed the second letter as an individual, even though the letter bore the logo of ACU.

"Our position hasn't changed," said Whitfield, who was a deputy secretary of labor in the Reagan administration. "It won't change. I am fundamentally, philosophically opposed to doing what the Obama administration wants to do [to FedEx], and so is our organization."

FedEx and UPS, fierce competitors in the package delivery business, are at war over a provision under consideration in Congress that would expand union power at FedEx.

FedEx currently has one U.S. union contract for its entire express business. Under a change passed by the House and awaiting action in the Senate, FedEx — like UPS — would have to negotiate union contracts for individual locations, which FedEx claims would make it much more difficult to promise worldwide regularity for deliveries.

The American Conservative Union, which calls itself “the nation's oldest and largest grass-roots conservative lobbying organization,” took UPS’s side on Wednesday as part of a conservative consortium that accused FedEx of “misleading the public and legislators.” ACU's logo is at the top of the letter, along with those of six other conservative groups.

Just two weeks earlier, ACU had offered its endorsement to FedEx, saying in a letter to the company: “We stand with FedEx in opposition to this legislation.”

But there was a catch — an expensive one. ACU asked FedEx to pay as much as $3.4 million for e-mail and other services for “an aggressive grass-roots campaign to stop the legislation in the Senate.”

“For the activist contact portion of the plan, we will contact over 150,000 people per state multiple times at a cost of $1.39 per name or $2,147,550 to implement the entire program,” the letter says. “If we incorporate the targeted, senator-personalized radio effort into the plan, you can figure an additional $125,000 on average, per state” for an estimated 10 states. The total would be $3,397,550.”

The letter shows one reason why activists get so much junk mail, both on paper and electronically: Some groups that send it charge handsomely for the service.

Under the grass-roots program ACU proposed, “Each person will be contacted a total of seven times totaling nearly 11 million contacts total in the 10 targeted states.” “Within 72 hours of an agreement on the whole plan, we can have the data sets delivered and the first round of e-mail ready for delivery,” the offer states. “Within seven days, the mail can be in the USPS system and the phone call delivered.”

Lane, the FedEx official, said the offer was refused. "The proposal didn’t fit with our strategy of taking a straightforward approach to discussing the issue,” he said.

After the rebuff, American Conservative Union changed sides. ACU Chairman David A. Keene was one of eight conservative leaders who signed a letter to FedEx Chairman Frederick W. Smith, a champion of capitalism who in the past has been a favorite of conservatives.

The letter accuses FedEx of “falsely and disingenuously” labeling the rules change a “bailout” for UPS, since FedEx would become subject to the same arduous union structure.

The letter is also signed by Grover Norquist, president of Americans for Tax Reform, who is also on ACU’s board. FedEx is pushing its case with a website called Brown Bailout.

The letter signed by the conservative leaders concludes: “To paraphrase the words of Ronald Reagan, ‘Mr. Smith, tear down this website.’”

Among the services ACU had offered to provide for the $2 million-plus price tag:

—Acquiring data of known conservatives in the targeted states (to be determined by FedEx), matching that data to an e-mail database and then incorporating those e-mail addresses with the current ACU e-mail database to create one targeted database of all potential activists.

—Sending a piece of targeted direct mail to these potential activists to ensure that they are well-educated prior to their contact with their senators.

—E-mailing the identified voter activists, in five rounds, in order to educate them on the issue(s) and to urge them to call their senators based on key dates. The ACU would include the phone number of their personal senators directly in the correspondence.

—Conducting targeted phone call campaign that will contact all voter activists to urge them to make a personal call to their senators. Each state would have a specialized message just for that state.

—Encouraging activists who live within 30 miles of a senator’s district office to consider making a personal visit to register their concerns at the office. ACU has proved that we can turn out well-informed, quality voters who present a good image to represent our concerns.

—As the vote for the legislation nears, distributing ACTION ALERT e-mails, and after the vote has taken place, distributing MegaVote e-mails to ACU’s members letting them know how their senators vote.

That explains this from a few days earlier...

A number of conservative groups are blasting FedEx for taking a cheap shot at UPS, charging that FedEx is falsely accusing its rival of seeking a federal bailout.

The clash revolves around legislation that would clear the way for FedEx drivers to organize with the Brotherhood of Teamsters, just as UPS’s drivers are. FedEx opposed the measure, which was supported by both UPS and the Teamsters, and set up a website titled “brownbailout.com” that accuses UPS of “quietly seeking a congressional bailout designed to limit competition for overnight deliveries, leaving Americans with a less reliable next-day delivery network for critical goods like medicines and essential inventory.”

“Why is megacorporation UPS trying to use its political clout to get a bailout from the U.S. Congress, leaving you to pay the tab?” the FedEx website asks.

But a letter signed by former Sen. Malcolm Wallop (R-Wyo.) and the leaders of Americans for Tax Reform, Frontiers for Freedom, the American Conservative Union, 60 Plus, Citizen Outreach, the Small Business & Entrepreneurship Council and the National Taxpayers Union alleges that FedEx is mischaracterizing the situation and unfairly trying to tap into public resentment against federal bailouts to attack its competition.

“FedEx’s campaign called ‘Brown Bailout’ is designed to capitalize on public sentiment that is angry that hundreds of billions of dollars have been wasted in the name of bailouts,” the letter reads. “But since UPS is not seeking even one dime of taxpayer money, the campaign is essentially a disinformation campaign and should be stopped.”

“If FedEx wants to oppose the regulatory reform being sought by UPS, that is fine,” the letter continues. “But FedEx should use honest arguments and refrain from disingenuous and dishonest labels.”

Read more: Conservatives deliver FedEx smackdown - Andy Barr - POLITICO.com

So why is UPS looking for a bailout?

What you aren't hearing about is the big bucks UPS is paying out like FedEx was supposed to do. It's definitely much easier for UPS since they are much bigger and make more profit than FedEx. FedEx may lose this pay to play political warfare.

UPS wanted to be under the same rules as FedEx when they didn't look much like FedEx at all. They fought to do so but were denied. In the meantime, UPS kept changing the way they did business to match FedEx. Isn't it just sour grapes that they now want FedEx under the same rules? Why did UPS change if they felt the rules wouldn't let them compete? Is UPS really being hurt? They make more money and have better margins than FedEx.

Are we really supposed to buy the argument UPS needs a more level playing field? They are the 800lb. gorilla, I mean Brown bear.

From the ACU website:

FOR IMMEDIATE RELEASE
July 20, 2009


CONTACT:
(703)836-8602

ACU on POLITICO Smear



ALEXANDRIA, VA - Last Friday Politico carried a story alleging that I had on behalf of ACU made a “pay for play” proposal seeking funding from Federal Express as the “price” of ACU support in a legislative battle raging in Congress.

The allegation is totally false. ACU continues to oppose a Congressional action that would extend NLRA jurisdiction to Federal Express and deliver the company and its employees into the hands of the Teamsters.

ACU’s opposition to doing this predated a funding proposal sent to Federal Express by ACU staff.

Neither ACU nor I have heard from Federal Express on the status of that proposal and we have neither asked for nor received any funds from UPS.

My position and ACU’s on the NLRA issue has not and will not change. Our opposition to what amounts to forced unionization is based on principle not personal, professional or financial considerations.

ACU’s positions on issues affecting this country have never been for sale and never will be.


David A. Keene

Chairman

American Conservative Union

# # #

The American Conservative Union (ACU) is the nation's largest conservative organization. ACU is the recognized authority on rating conservative votes in Congress and the American Conservative Union Foundation (ACUF) is the host of the annual CPAC meeting. ACU is on the web at: The American Conservative Union

More whining to follow soon from Fred Smith, I'm sure.

Wah waah.

Seems odd that unionized pilots from Fed Ex would post negative on this forum when what is being debated is their fellow driver employees right to unionize. Guess brotherhood only extends to their fellow pilots.

and don't forget UPS has tried numerous times to get under the RLA!

"In 1936, airlines were brought under the RLA. FedEx, which began as an air freight company and created the modern express business, is precisely the sort of integrated system for which the RLA was written. This matters: 53 percent of all U.S. exports by value travel by air, and virtually all priority and express U.S. mail is carried by FedEx.
In 1981, UPS began air services, and in the 1990s it tried, legislatively and judicially, to be put under the RLA. In 1993 UPS said all of its operations, “including ground operations,” are properly subject to the RLA “because the ground operations are part of the air service.” FedEx supported UPS’s efforts, even though the vast majority of UPS parcels never go on an airplane, whereas FedEx’s trucking operations exist to feed its air fleet and distribute what it carries.
FedEx characterizes itself as the “world’s most effective airline” and UPS as “a 100-year-old trucking company.” FedEx, Smith insists, is not anti-union; its pilots are unionized. He says that the pay and benefits for its drivers are, on average, higher than those of UPS drivers and that new FedEx drivers must wait only three months to be eligible for benefits whereas UPS drivers must wait a year. Nevertheless, today’s Democratic majority in Congress, with UPS now aligned with the Teamsters, wants to put FedEx’s ground pickup and delivery operations under the NLRA, thereby making FedEx’s entire integrated system susceptible to disruption by local disputes." :rolleyes:

I think you'll find that most FDX pilots are pretty loyal to FDX ALPA. As for anyone else, probably not so much. The language in this bill stands to hurt our company, perhaps significantly. I can only speak for myself, but I'd rather FDX be a successful company for the next 30 years or so. If that means opposing the political machinations of the Teamsters, so be it. Now, if ALL FDX drivers and mechanics across the country want to organize into a single union, I'd support it. But, individual locals? No way.

Here we go again. This is not about whether they can unionize...it's about how they can unionize. FedEx Express is an Airline not a trucking company like you boys at UPS. These guys have every right to unionize as one employee group across the company, not as individual shops.

I'm really tired of UPS guys throwing stones....If you guys don't like your job maybe you should go find another one rather than attacking ours.

Yeah, it's such a shame that employees are not allowed to unionize under the RLA. But wait! Funny how almost every company under the RLA has unions. How is this preventing Fedex employees from unionizing, in the same manner as pilots, flt attendants, mechanics, baggage handlers, ticket agents, customer service agents, and any other employees at all the other RLA companies do?

Um, I think that was his point. :p

geez lillian, it's another Brown- Purple / Purple-Brown pilot food fight<g>. I remind my fellow aviators of both stripes. We are night drivers, do the same thing, have the same roots and both figured out that Purple and Brown was as stable a job an airplane driver could find. After that, 99% of us would have gone to either. Management uses us as tools in the food fight. They despise all of us equally. BTW, It is all our fault in the first place <g>. Lets be pilots and go hang out on the side and watch the fireworks, I'll bring the beer. Cheers.

I can't think of many people who have been more successful than Fred. He has single-handedly steered a startup company to become one of the largest most successful in the world, to the point where the name of the company has become a verb.

I do not think Fred is prone to whining, I do think he is prone to getting results. FWIW, if I had been individually responsible for creating such an organization and employing (and enriching) so many people - I would have a much bigger ego than Fred does.

How much money did little Fred's daddy leave him to startup his company again? Over $100 million?

Singlehandedly huh? I bet the $100 mil had something to do with it. :D

I know the rumors - could you turn even $100 mil into an equivalent of FedEx? While you may or may not like how he does business, he still isn't a whiner.

For the record - the most common story is $4 million inheritance and $91 raised from venture capitalists.

UPS is much larger and makes more profit, at higher margin, than FedEx. UPS is not behind the 8 ball at all. This is just power politics at work. If there isn't a need to change a law the best course is not to mess with it.

Why does UPS need a bailout with this legislation?


If you can't answer then they don't.

The young entrepreneur (Fred Smith) raised $80 million to launch Federal Express, informally known as FedEx. The delivery service began modestly with small packages and documents. On the first night of operations, a fleet of 14 jets took off with 186 packages. In the first two years, the venture lost $27 million. In a short time, the company was on the verge of bankruptcy. It appeared that Smith had lost all of his investors' money, including the capital of his own brothers and sisters. But Smith succeeded in renegotiating his bank loans and was able to keep the company afloat.




Google is wonderful thing...

Don't use facts with stalkers. It only confuses them and makes them make even more outrageous claims. Some of these guys really go overboard when attacking Fred. Makes me wonder if they busted the testing, interview or sim check poriton when turned down for a job here. Either way a good therapist could help them move on with their lives..

Wow, sorry to ruffle your feathers. I didn't realize that I was talking to the president of the Frederick W. Smith Fan Club. <g>

I take back everything I said. Fred is so awesome. His business instincts are unmatched. He is like a tiger.

He never used his daddy's money (almost $100 million in TODAYS DOLLARS) and borrowed the rest from his rich uncles. He did it all singlehandedly.

He is so amazing that women fall to his feet (and some men too it seems <g>) hoping to be ravaged by him.

He is all knowing - even more amazing than Michael Jackson.

We all shall fear him. <vbseg>


ps. Relax guys. I'm not insulting you or any FedEx pilots. In fact, I think that you all accomplished more than he ever would have without his daddy's money.

Plus, he is a whiner! Waa Waa.

Now you're talking.

He's so tough, the boogie man checks under his bed for Fred Smith!

I think Fred can kick Chuck Norris' a$$:D

What about One Fred Smith, with half of his brain tied behind his back (ala Rush) against Sam Walton, Ted Turner, Donald Trump and Warren Buffett?

Fred $1,000,000,000,000,000,000 to $10.

Support them, they need representation
 

Yea, all of you can bicker and do the "one up" thing here but remember this .......................... they need to be represented so they can also look forward to a decent Retirement plan, decent wages and health care just like we that are represented expect it ...............

I am afraid many of you have missed the point. What was passed off as a "conservative" entity by the OP is really nothing more than a hired gun. This is the way of lobbyists. They sell whatever they are paid to sell. They will happily sell your mother if the price is right. To either side.

What Fred and many others like him have done for this country is a great thing. Jobs, innovation and leadership. Hired guns are a dime a dozen, but innovation is a precious rarity.

All the best to my Purple brothers.

Now that's funny...true, but funny;)

'Zactly!...

Is there ANY doubt that lobbyists/Unions/politicians(exceeded my quota of slashes) don't give a rat's a$$ about the issue they are supporting/defending or bribing whomever necessary in order to get the vote to go toward "their"(prostitutes in suits) position on an issue?? ALPA: Age 65......over 60 was a "safety" issue until the guys who lost their pensions started squawking loud enough; then it suddenly became a ICAO fairness issue......Your 2% annually goes to a bunch of dudes in Wash DC who have absolutely NO regard for what really affects you on a daily basis..it's all about THEIR Benjamins and their hopes of retaining national office. I mean come on folks...wake up and smell the coffee.......we are hourly employees...nothing more, nothing less. The sooner you come to understand and accept that; the sooner you can pop a cold one on the back porch and thank God you don't have a REAL boss who checks to see if you make budget or get rid of the dead wood. The pilot profession has become the 21st century rodeo clown...without the cool makeup.

But, we have the cool monkey suits!

I think some on the Brown side were offended that Uncle Fred took out a website claiming a bailout. FDX has route authorities that UPS does not have and vice versa...however I don't ever remember one setting up bogus websites to support their company or discredit their competitor like Uncle Fred has in this case.

Many, many good people work at both outfits, and both companies are both respectable and offer sought-after jobs in aviation. However, public mud-slinging has never been FDX's style nor does it further their endeavors.

FF

WAAAAA!...offended? how about UPS and the teamsters trying to destroy what Fred has spent over 35 years building under the RLA model? UPS has tried numerous times to get under the RLA and failed! gimme a break!

Destroy? The only thing keeping FDX alive is the fact that the Teamsters aren't there? Puleeze. Do you really think you would not survive the teamsters? Don't sell your organization so short. Sounds like you are buying into the typical anti labor rhetoric.

FDX is built under the RLA!....there is nothing from stopping other employees from organizing now...and this coming from someone who comes from an organization(IPA) who kicked out the teamsters!:rolleyes:

The workers who would be most affected by this change are the drivers and package handlers who work for the hundreds (if not thousands) of "independent contractors" employed by FedEx. They range from small "mom-and-pop" operations to medium-size trucking companies in size and scope of operations. Pay and benefits among those companies varies widely, from minimum-wage to above-industry-standard.

It's completely unrealistic to believe that any union could simultaneously organize such a wide-ranging and disparate group, a fact that Fred Smith has been counting on for all these years. But even if it were possible, it would be unfair to penalize those "contractors" who do treat their employees responsibly by making them the subject of an effort to organize.

Fred (and his family) got theirs. His investors got theirs. The pilots got theirs. Now it's time for the drivers and ground workers to get theirs.

Once again another independent contractor idiotic statement. Independent contractor applies to Fedex Ground drivers and Fedex ALPA pilots. It does not apply to other non union Fedex Express employees.

I know you guys would like the San Diego drivers to be able to shut down FDX operations because there are not enough tampons in the ladies room, but keep your facts straight.

Ummmm...the tampon machine has been filled.

In rare twist I agree with the Boy here. UPS has built it's business model over the past 100 or so years and has evolved to be what they are today. FedEx has done the same thing in much less time. I think it would be unfair to expect a company as large as FedEx to be able to modify and adapt to something that would cause the entire company to operate differently.

It's all how you started. FedEx started as an airline and bought some trucks. UPS has and still is a trucking company that has some planes. 80% of FedEx packages at some point ride in a FedEx plane. I'd bet the opposite is true at Big Brown.

UPS moves 3 or 4 times the amount of freight every day that FedEx does, but somehow does it with less than half the aircraft. The RLA is not for trucking companies.

Both are great companies but their operations are much different. My money is on "Uncle Fred" winning this argument.

Dude, stop confusing the issues. You are showing your ignorance of the two labor/FedEx issues in play right now. One has nothing to do with the other.

There are NO independent contractors at FedEx Express. The independent contractors that you read about in the news work for FedEx Ground. FedEx Ground falls under the NLRA and can organize any way, any time they like.

FedEx Express falls under the RLA. There are NO "contractors" driving trucks for FedEx Express. They are ALL FedEx Express employees. They are like the tug drivers/baggage loaders/mechanics, etc. at any other airline. They are governed by the RLA, which means that they can organize, but they have to do it nationwide. Just like most every other airline employee group in the country has been able to do.

So, to summarize... FedEx Ground and FedEx Express are two separate companies. FedEx Ground has the independent contractor driver issue. FedEx Express has the NLRA/RLA issue... and never the twain shall meet.

Capiche?

There must be a joke about why your ham is in your fist and how you know the status of the ladies room supplies; but I can't put it together.;)

There might be ...

But you are the one who knew the dispenser was running low !

;)

Back at ya !

:D

FDXLAG & Sluggo 63-

Too many issues going on over there. I stand corrected.

First I've heard about the Tampon machines, though.