(Chuck Muth) – Recently, FedEx’s “Brown Bailout” ghost-writers urged their supporters and employees to write their legislators and urge Congress to strip out a provision in the Federal Aviation Administration (FAA) reauthorization bill which would end a legal advantage that FedEx Express and only FedEx Express enjoys.
“UPS and the Teamsters are working to push a job-killing ‘Brown Bailout’ provision in a very important piece of legislation that would modernize our national air travel system,” the anonymous authors of the Brown Bailout website wrote. “Yet 230 words inserted by UPS would only harm its main competitor, FedEx Express, and have the opposite effect of creating jobs – it threatens them – at FedEx, at its suppliers and at its customers.”
First of all, the “provision” in question does nothing more than place FedEx Express delivery drivers under the same labor law – the National Labor Relations Act – as every other delivery driver in the nation. This is not a “job-killing” provision; it’s a field-leveling provision.
Consider the following from a recent report by former Sen. Malcolm Wallop’s Frontiers of Freedom Institute titled FedEx vs. UPS: A Conservative’s Take on Equality Under the Law:
“FedEx and UPS both compete to provide consumers with a wide-variety of shipping services. They both have large fleets of aircraft and pilots and crews to operate them. They both have huge fleets of trucks and a vast army of truck drivers to deliver their packages to homes and businesses across the globe. But although FedEx and UPS are competing in the exact same business, they are governed under a separate and unequal set of labor regulations.”
And that’s what this is really all about. It’s an “equal justice under law” issue, not a twisted definition of “bailout” for political purposes provision.
So how did we get to this point in the first place? Again, from Frontiers of Freedom:
“UPS was founded more than 100 years ago and at a time no airplanes were even available to ship packages. It was originally a trucking company. So when labor regulations were passed in Congress in the early 20th century, UPS was regulated under the National Labor Relations Act (NLRA). In contrast, FedEx was founded in the 1970s and because it used airplanes from its inception, its pilots and airline workers was regulated under the Railway Labor Act (RLA) which regulates airline and railway workers.”
The problem, however, is that FedEx has been pretending that its truck drivers are airline workers. “There are 2,581,540 truck drivers in the U.S. and 2,520,540 are covered under the NLRA,” notes FoF,” while only about 60,000 FedEx drivers are not.”
Or, as FoF continues, look at it this way:
“Delta/Northwest and FedEx both have very large fleets of planes, but Delta/Northwest has 107 more planes than Fedex. Yet FedEx has almost double the number of airline employees as Delta/Northwest – and FedEx is moving cargo, not people. . . . FedEx manages to claim double the number of airline employees as an actual airline that has 107 more planes than FedEx. How is that possible?”
I’ll tell you how. Because FedEx is “gaming the system” by being allowed to categorize its delivery drivers as airline workers, that’s how.
But so what? What’s the harm, right?
Well, the harm is that this disparity provides FedEx with a potent marketing advantage which it has used over the years to great effect by telling customers it’s the more reliable express delivery company to do business with because its truck drivers are non-union while UPS’s truck drivers belong to the Teamsters.
And to be perfectly honest, many conservatives and Republicans have initially sided with FedEx simply because fixing this inequity in the law *might* benefit organized labor, which hasn’t exactly been friendly with the GOP on most issues.
But once conservatives get beyond the understandable initial knee-jerk anti-union reaction, they’ll see that this isn’t really about unionization at all. It’s about one American company vs. another American company – both of which have American stockholders and employ American workers to provide the exact same service to American citizens and businesses.
American law currently gives one of those American companies the unfair business equivalent of hitting from the ladies tees when it comes to marketing their services.
From the FoF report:
“The FedEx pitch goes something like this – with FedEx you don’t have to worry about a strike. But with UPS if there is a strike, your packages will not ship and we won’t have capacity to help you at that point. But if you sign up now with FedEx, you’ll have no worries.
“This, of course, is belied by reality and years of real life experience. The truth is this is little more than a scare tactic. But it has been an effective and important part of FedEx’s sales pitch – an approach they deny using, but one that has been used over and over nonetheless.”
Indeed, FedEx’s entire lobbying campaign against the FAA provision which would put their 60,000 truck drivers under the same federal labor law as the rest of the nation’s 2.5 million truck drivers is based on scaring Republican members of Congress into thinking this issue is about the big, bad unions rather than righting a legislative wrong.
That’s why FedEx’s lobbying campaign makes claims that the FAA provision will “harm” FedEx and “threaten” jobs. Their entire fear campaign is intended to make people think that if FedEx’s drivers are placed under the same federal labor law as UPS’s drivers, FedEx’s drivers will immediately “go union” and FedEx will go out of business.
What a crock. Or as the FoF report explains:
“Three out of four FedEx corporate divisions have been covered by the NLRA for many years and not a single worker has joined a union. Simply stated, FedEx’s Freight, Ground and Services employees are regulated under the NLRA and they are not unionized. So there is no reason to believe if the Express division truck drivers were also regulated under the NLRA that they would unionize either. The only union employees that FedEx has are its pilots who are unionized under the RLA. So the unionization argument is a ruse and a sham.”
Aside from its airline operation, FedEx has over 100,000 other employees currently covered under the NLRA and none of them are unionized. And as long as FedEx takes good care of its truck drivers there’s no reason whatsoever to believe their truck drivers will “go union.”
But even if they did, would that put FedEx out of business as FedEx insinuates would happen?
Of course not.
UPS truck drivers belong to the Teamsters….and yet UPS continues to provide the same express delivery service as FedEx for similar prices. However, think for a minute exactly what FedEx is saying here.
They’re claiming that if Congress changes the law and places their truck drivers under the same labor law as UPS’s truck drivers, they couldn’t successfully compete on such a level field in the open market with UPS.
Which is, in reality, admitting that the FAA provision isn’t a “bailout” for UPS, but an end to a corporate welfare subsidy for FedEx.
In other words, FedEx is arguing that it’s “too big to fail” and, therefore, Congress needs to continue providing FedEx with the advantages this inequity in the law provides in order for them to stay in business.
Um, so which company is asking for a bailout again?
(Mr. Muth is president of Citizen Outreach, a limited-government grassroots advocacy organization)