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FedEx Attacks Bill as UPS “Bailout”

JOC Staff | Jun 9, 2009 3:50PM GMT

The Journal of Commerce Online - News Story

Labor legislation would make union organizing easier

FedEx is going after UPS directly in an aggressive new campaign the express carrier launched Tuesday against efforts to make the company a more ready target for unions.

FedEx termed proposed labor legislation a "bailout" of UPS that would undermine the reliability of express delivery, and the company created a Web site called BrownBailout.com as a foundation of its effort.

In its campaign, FedEx calls itself "the creator of the overnight delivery" and portrays UPS as a company that faced a strike by the Teamsters in 1997 "that crippled business and commerce across America."

“Now it wants Congress to expose FedEx Express to that risk,” said Maury Lane, a spokesman for FedEx . “America relies too much on the reliability and dependability of the FedEx Express overnight-delivery network, and we can’t allow this bailout to pass only because UPS wants to harm its main competitor.”

Why Doesn't FEDEX let their own workers decide if they want to be unionized or not? FEDEX is trying to not give their own employees a chance to vote. That is un- American! Democratic Congress vote for the Free Employee Choice Act! Go Obama-- sign it into law!

- By Let the FEDEX w... on 7/2/09

If FedEx is so concerned about disrupting the economy, bringing up the 1997 Teamsters' strike against UPS, then why don't they lobby congress to have UPS fall under the same rules that they play by. It seems to me that all UPS wants is a level playing field. NRLB or RLA - just put them both under the same one. Then we'll see who is the better competitor.

- By Mistertoldja on 6/11/09

UPS does not have to talk negative. All they have to do is contribute over $80,000 to the sponsoring Senators campaign and he will do it for them. Read On:

FedEx Express is learning what could be the Democrats' economic motto -- "Never Let Success Go Unpunished."

Led by Rep. James L. Oberstar, Minnesota Democrat, the House on May 21 passed legislation that contains an almost hidden provision -- a mere 230 words -- that would hobble FedEx Express. It would do so by completely changing the labor laws under which the company operates. Unless the Senate removes the language from the underlying bill reauthorizing the Federal Aviation Administration, a mere dozen or so workers in just one city could hamstring much of the nation's overnight delivery service.

We Americans take for granted that things can "absolutely, positively ... be there overnight" -- but it took FedEx Express to make that so. FedEx Express is, of course, one of the great corporate success stories of modern times, having grown from a mere idea in a 1965 term paper by Yale University undergraduate Frederick W. Smith into a company essential to the workings of our modern economy.

It is a little-known fact that FedEx contracts with the U.S. Postal Service to carry almost all of its Express Mail and a large proportion of its Priority Mail. FedEx delivers huge amounts of needed supplies for American military forces, too -- and its service is just about the only way to guarantee that some lifesaving medicines reach patients overnight.

Lawmakers have long recognized that certain sorts of transportation companies are the lifeblood of interstate commerce. That's why they wrote the Railway Labor Act to apply special labor-relations rules to railroads and, eventually, airline-based businesses such as FedEx Express. Since 1926, the RLA has provided successfully for means other than strikes to resolve labor disputes fairly and quickly, without favoring either side.

The RLA does not, however, apply to non-rail, mostly ground-transportation companies such as the United Parcel Service. UPS instead is governed by the National Labor Relations Act (NLRA), the terms of which favor unions such as the Teamsters, which represents UPS drivers. Naturally, this means UPS and the Teamsters both have an interest in kneecapping FedEx Express. Together, the ground-delivery company and the union have executed what The Hill newspaper called a lobbying "pincer movement" to transfer authority over FedEx Express from the RLA to the NLRA.

The UPS corporate political action committee has "given more money to federal lawmakers than any other company over two decades," according to Bloomberg News, with $77,900 from UPS employees going to Mr. Oberstar since 1989. The Teamsters, who lean heavily Democratic, have donated $86,500 to Mr. Oberstar during that period.

Mr. Oberstar argues that he is merely trying to treat similar workers similarly. FedEx Express counters that it and UPS are very different companies. FedEx says it ships 85 percent of its goods by air, whereas UPS sends 85 percent of its goods by truck.

UPS trying to squash FedEx Express is like Goliath sitting on David. Again using FedEx Express numbers, UPS has 425,000 employees in a business doing $49.7 billion in annual revenue, compared to FedEx Express' 143,000 employees and $22.7 billion in revenue. With UPS so much bigger than FedEx Express, it doesn't make sense to argue that "Big Brown" somehow suffers a competitive disadvantage. Indeed, the latest earnings estimate for UPS shows growth from $2.37 to $2.90 per share, while FedEx Corp. has shown a decline from $1.26 to $0.31.

With the economy as a whole so shaky, this is the worst time for Congress to change the rules governing such an important facet of interstate commerce. The old wisdom should apply still: If it ain't broke, don't fix it.

- By farowe on 6/10/09

Unions are not necessarily evil. Only if you are in senior mgmt and take an antagonstic attitude toward unions. I have seen what has happened to companies that have voted to go union. In general the employees have seen work environment improvements and benefits increased.

To the comments by Mark D. it wasn't just the unions that caused the downfall of the American auto industry. Senior mgmt did its fair share with bad decisions on product lines.
I don't see Boeing, which is heavily unionized sharing the same fate as Chrysler.

Take a look at the U.S. health care system, which requires companies to provide premiums to health care insurance companies. In the rest of the world, health care is subsidized by a single payer gov't run system. This puts U.S. companies at a disadvantage.

If mgmt provided a living wage, and decent benefits, there would be no need for unions. But what has happened in America is that the executives are taking the profits and distributing them amongst themselves. Why does a CEO need a $10 million dolar salary and millions of stock options? And these are the same executives complaining that the minimum wage was increased after not being changed for 10 years, while inflation was creeping up at 4.5% a year.

I feel no sympathy for FedEx. If they are treating their employees fairly, and their employees are happy, FedEx mgmt has nothing to fear from unionization attempts.

- By Mozart on 6/10/09

Wow... FedEx is pretty desperate. If i was a customer I would look to move my business elsewhere. Instead of preparing for the inevitable, FedEx is spending "multi-millions" of dollars on a smear campaign, even after shamelessly cutting its employees salaries. Not a good time to be associated with this company!

- By js on 6/9/09

UPS NEVER says desparaging remarks? What;s the color of ths sky in homesicks' world. Take a look at the UPS White Board commercials. All the info that their sales people present to customers about their competition. I know this first hand being a customer for both carriers. Less honrable practices were developed by UPS.
Gee, no one ever mentions that UPS sought to have their drivers reclassified from the NLRA to the RLA. Only after a decade of failure at that effort did UPS join the Teamsters in trying to reclassify FedEx. If UPS does a better job then why for 12 consecutive years was FedEx ranked number one in customer satisfaction in Express Delivery industry and also first among 81 companies whose customers are surveyed in the first quarter by the University of Michigan's American Customer Satisfaction Index (ACSI). Doing your homework before you make comments. UPS wants FedEx Express to be unionized because misery loves company!

- By Bestman on 6/9/09

Regarding the unions, look what they did to the American auto industry.

- By Mark D. on 6/9/09

Here we go again, American bosses dumping on unions, trying to exploit an irrational fear.

Througout the European Union people are unionized at far greater rates than in the U.S.

What does it do? For one it makes that those countries are governed a little more for the well being of the people, not for Wall Street speculators. Because of this Europeans are happier, healthier, and actually live longer than Americans!

Bummer!

- By Prudent on 6/9/09

In response to " I realize it is politically energizing...", why would anyone listen to your whining, you sound like a UPS employee!! We want non-biased opinions. I personally prefer FedEx over UPS.

- By Mark D. on 6/9/09

I realize it is politically energizing to use the words "company bailout" as an attention getter, but Federal Express has risen to a new low. Federal Express was an air business that went into ground delivery. They purchased a company named Roadway Package System and kept these employees as, so-called , contract drivers in an effort to get tinto the ground business and keep costs down. I admire them for that!. The problem comes when you enter the same business as a competitor and are unfairly able to keep costs artificially low due an unfair labor practice Fedral Express is just supposed to expand at United Parcels expense? I don't think so. Maury Lane,spokesman for Federal Express, sounds just like a baby that has had his teat taken away. Everything was warm and fuzzy for all these years, as long as you had an edge. Now you may actually have to compete head to head and it scares you half to death. I for one, know the capabilities of United Parcel Service. I also know that UPS does the job FEDX does and better. What makes you think that a level playing field will some how hurt the economy? What makes you think that you will become unionized? If you are unionized, what makes you think you will not be more productive and able to cut costs. You already run two drivers to the same address to deliver, one for air, and one for ground. Do you think this saves money? I know, you are scared that the Unions will cause problems for you and disrupt your service! That did not bother you back in 1997 while your customer service reps were out telling our shippers that we were definitely going on strike. Yea, six months before the vote. It did not bother you to use this to garner volume and create doubt in the customers eyes. You personally used the threat of a strike at UPS to siphon volume from UPS by using less than honorable practices. I hope for your sake, that you have to abide by the same rules as your main competitor and have to become as cost effective. Your stock holders will deeply appreciate your abilities and surely will reward you for that. The hard part about this campaign is telling your people and shareholders how you came up with the millions of dollars to have this Brown Bailout campaign. Especially when the proof is obvious. How can you spin the truth? I don't know if you have ever noticed, but UNITED PARCEL SERVICE never says desparaging remarks about it's competition. UPS considers this unprofessional conduct. I see that your company does not have the same upbringing.

- By homesick on 6/9/09