FedEx Looks to Deliver -- to Senators

Updated from 9:59 a.m. EDT

An edgy FedEx(FDX) media campaign, opposing a change in the company's labor classification, may outrage some people and amuse others, but the truth is it barely matters what the public thinks.

The campaign is aimed at the 100 members of the U.S. Senate, who are about to consider legislation that would alter the classification, potentially making it easier for unions to organize.

In last-minute maneuvering in 1996, the Senate agreed, despite fierce opposition, to codify FedEx's designation as a Railway Labor Act company, which makes labor organizing more difficult. Now FedEx again needs the Senate's help.

Oddly, the focus of FedEx's attention is competitor UPS(UPS). In general, UPS has a positive image, unlike payday lenders or AIG, raising the question whether any benefit accrues from attacking it. Yet in its campaign, viewable at brownbailout.com, FedEx maintains that UPS is seeking a bailout in order to limit competition.

FedEx Goes After UPS

Unlike FedEx, UPS falls under the National Labor Relations Act. The NLRA enables workers to organize on a location-by-location basis, while the Railway Labor Act requires companywide employee voting, which is more challenging for unions. UPS says it has lobbied for but did not initiate the change in FedEx's status.

The FedEx campaign is "preposterous," says Ken Hall, director of the Teamsters Package Division. "It doesn't pass the smell test. They're trying to play this as a bailout for their competitor because they don't have a good argument on the merits."

Hall, who is lobbying senators, says the campaign may backfire. "FedEx is acting as if the Senate owes them this, and a lot of senators are not impressed: they are offended," he says. "They are saying they will not be intimidated." So far, Hall says, he has talked to about a half dozen Democratic senators, some traditional labor backers and some middle of the road. He plans to contact every senator.