When it Absolutely, Positively Has to Be Unionized

FedEx has decided to play hardball if Congress wants to go through with changes that would make it easier for the unions to swoop in:

FedEx Corp. is threatening to cancel the purchase of billions of dollars worth of new Boeing Co. cargo planes if Congress passes a law that would make it easier for unions to organize at the package-delivery company.

A company spokesman said Tuesday 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 labor organizing at U.S. airlines.

FedEx's actions raise the stakes in an increasingly bitter battle involving chief rival, United Parcel Service Inc., and the Teamsters union, which has been trying for years to organize 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."


Getty Images
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 labor 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 $7 billion, 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, Mr. Lane said.

FedEx can always buy cargo planes from Airbus. I wonder how that would go over with the unions?