Things in the Sky

FedEx issued a new SEC filing last weekend, but I didn’t even notice it until a Wall Street Journal article pointed out an interesting part of it:

In addition, in January 2009, we exercised our option with Boeing to purchase an additional 15 B777F aircraft. 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. In January 2009, we also obtained an option to purchase an additional 15 B777F aircraft. Accordingly, we have now agreed, subject to the above contractual condition, to purchase a total of 30 B777F aircraft and hold an option to purchase an additional 15 B777F aircraft.

Apparently, according to the same Wall Street Journal article, FedEx has had a labor advantage over UPS for years. Because FedEx started as an airline, it is covered under the Railway Labor Act, while UPS, which started as a trucking company, falls under the National Labor Relations Act. Apparently the latter law makes it easier to unionize.

I can’t say I support the idea, but it is a great way to play politics, to say the least. Basically, FedEx can say an approval of this bill will hurt Boeing union workers. I wonder if this strategy will change the votes of any representatives from Washington.

While I understand FedEx’s motives here, I dont think this is the best move. In my opinion, it would be better for the company to figure out why employees would want to unionize, and try to deal with those issues first.