March 25, 2009

FedEx indicates dim view of union option

U.S. courier FedEx Corp. is linking commitments to buy new aircraft to its protection from unionization under the Railway Labor Act, a federal filing shows.

FedEx indicated in its filing with the U.S. Security and Exchange Commission last Friday that could cancel contracts for $6.7 billion in U.S.-built Boeing 777s if lawmakers move the Memphis delivery service company out from the railway act's protection and put it under the National Labor Relations Act, The (Memphis) Commercial Appeal reported Wednesday.

Such a move could crack the door open wider to the Teamsters and other unions that would like to represent FedEx employees, and the wording of the filing was seen by some as a warning to federal lawmakers, the newspaper said.

It's FedEx political hardball at its finest, said analyst Donald Broughton of Avondale Partners in St. Louis.

U.S. Rep. Steve Cohen, D-Tenn., said it shows how committed FedEx is to remaining under the railway act.

That's a pretty strong shot at the Teamsters, who are a pretty strong force on the other side, as well as UPS, Cohen said. It's a shot across the bow.

FedEx spokesman Maury Lane says the company is not threatening Congress. But, he said, the change could cause extraordinary upheaval.

We will not be able to make large-scale investments like purchases of airplanes, if we can't use them, he said.