Thoughts from a Yellow Dog Democrat living in Olympia, in the great BLUE state of Washington

I am a liberal because it is the political philosophy of freedom and equality. And I am a progressive because it is the political path to a better future. And I am a Democrat because it is the political party that believes in freedom, equality and progress. -- Digby

Wednesday, March 25, 2009

Another Extortion Attempt

FedEx could cancel contracts for $6.7 billion in American-made planes if Congress makes it easier for unions to organize the delivery giant's workers.

In a Securities and Exchange Commission filing on Friday, the Memphis-based delivery company disclosed that future commitments to buy Boeing 777s are contingent on FedEx Express' continued coverage by the Railway Labor Act.

The disclosure serves as a warning to lawmakers seeking to put FedEx Express workers under the National Labor Relations Act, a move seen as helping the International Brotherhood of Teamsters and rival UPS.

The Seattle Times calls it this way:
FedEx said it may not buy 30 more Boeing 777 freighters if a federal law is changed to make it easier for its employees to join a union.

Following through on those orders and options, with a list price of $7.7 billion, depends on FedEx employees continuing to be under the Railway Labor Act, the company said.

That law, which covers FedEx workers because the company was founded as an airline, requires a national vote if employees want union representation.

Legislation approved by a U.S. House panel March 5 would make it easier for drivers of Memphis, Tenn.-based FedEx to vote locally to join unions, by placing the company under the National Labor Relations Act.

FedEx's larger rival, United Parcel Service, backs the proposed change, saying it would even the playing field. About half of UPS' employees belong to the Teamsters union, while FedEx's only unionized group is its pilots.

The Teamsters have been trying to win representation of FedEx drivers for years.

"If the regulatory and congressional environment remains hostile, there is virtual uncertainty over how we'd proceed," FedEx spokesman Maury Lane said Tuesday.

The change would "stymie competition and create an economic roadblock to recovery," he said.

"FedEx is an important Boeing customer and we understand the company's concerns about the proposed legislation," said Boeing spokesman Jim Proulx.

Did you catch that? UPS drivers have been members of the Teamsters for years. They seem to be able to do business just fine.

FedEx, Boeing, and GE are now resorting to extortion to get their way. I guess they figured lobbying and campaign contributions were no longer effective bribes.

UPDATE 3-26-09
Puget Sound Business Journal is also covering this story.
FedEx Corp. is dangling the possibility of canceling a multi-billion dollar order for new airplanes should Congress help its workers unionize.

The Memphis-based carrier noted in its third quarter filing the with SEC that in January it exercised its option to purchase 15 additional Boeing B777F aircraft and got an option to purchase 15 more.

Apparently that contract had some hefty clauses that were alluded to in the earnings report.

“Our obligation to purchase these additional aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the Railway Labor Act,” according to the filing.

Get that? They wrote it in the purchase contract! Screw labor!

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