FedEx threatens to cancel jet orders
FedEx is threatening to cancel the purchase of billions of dollars worth of new Boeing cargo planes if Congress passes a law that would make it easier for unions to organise at the package-delivery company.
FedEx is threatening to cancel the purchase of billions of dollars worth of new Boeing cargo planes if Congress passes a law that would make it easier for unions to organise at the package-delivery company.
A company spokesman said that FedEx may cancel plans to buy as many as 30 new Boeing planes should Congress pass a bill that would remove truck drivers, couriers and other employees at FedEx’s Express unit from the jurisdiction of the federal Railway Labor Act of 1926, the law which today also governs labour organising at US airlines.
FedEx’s actions raise the stakes in an increasingly bitter battle involving chief rival UPS, and the Teamsters union, which has been trying for years to organise FedEx. Ken Hall, international vice president and director of the International Brotherhood of Teamsters package division, accused FedEx of “blackmailing Congress” and “threatening to fire yet another torpedo through an already weak American economy.”
FedEx said it might defer jet purchases if employees, including these Memphis workers, fell under NLRA rules.
In January, FedEx exercised an option to buy 15 B777F planes, and has an option to buy an additional 15. FedEx negotiated language into its contract allowing the company to cancel the order should Congress pass the changes in labour law. FedEx also wouldn’t exercise the option for the second 15 planes if the law passed, a spokesman said.
A Boeing spokeswoman said the Chicago company hasn’t added the 30 planes to its backlog of firm orders because of the language in the FedEx contract. Boeing typically stays out of such matters, particularly when actions on behalf of one customer could put it at odds with another customer.
FedEx and Boeing declined to disclose the cost of the 30 B777Fs. At list price for the planes, the total order could be worth more than $7bn, although FedEx would likely pay a discounted price.
“It is exceedingly unlikely that we would purchase those airplanes” should Congress change the law, said FedEx spokesman Maury Lane. The legislation could cripple the company and eliminate the need for the extra planes, Lane said.
Among FedEx’s 290,000 workers, only the company’s 4,700 pilots are unionised. At UPS, about 240,000 of the companies 425,000 employees are union members, mostly Teamsters.
At issue is a bill approved 5 March by the House Transportation and Infrastructure Committee that could take away a key advantage FedEx has over UPS. Because Memphis-based FedEx was formed in the 1970s as an airline, it came under the jurisdiction of the railway act, which was written decades earlier to limit commerce-crippling strikes at railroad companies. The law complicates union organising by requiring company-wide employee votes on labour representation.
UPS, which began as a trucking company before the era of large scale commercial aviation, is governed under the National Labor Relations Act, which allows unions to organise companies on a location-by-location basis.
The bill, co-sponsored by House Transportation Committee Chairman James Oberstar, D-Minn., is part of the FAA Reauthorization Act of 2009. A nearly identical bill passed the House in 2007 but died in the Senate.
“That’s huffing and puffing, that’s all that is,” said Rep. Oberstar, in response to FedEx.
