FedEx ( FDX) is challenging Congress, and Boeing ( BA) is caught in the middle.
In a filing this month with the Securities and Exchange Commission FedEx -- concerned about pending congressional legislation that could alter its legal status relative to labor organizing -- said that if the bill were approved, it will not take delivery of 30 Boeing 777 freighters it has conditionally ordered. The order is worth $6.75 billion, estimates Avondale Partners. It's not the first time that aircraft orders, at both Boeing and Airbus, have been held hostage to labor issues, although the disputes have typically involved pilot contracts. In 1983, American ( AMR) linked orders for McDonnell Douglas MD-80s to creation of a B-scale for pilots. In 1997, US Airways ( LCC) linked orders for up to 400 new Airbus jets to contract changes. The airline is still taking deliveries. In the case of Air Canada in 2005, Delta ( DAL) in 1999 and American today, pending orders for Boeing aircraft have been predicated on agreements on rates to fly the aircraft type. It is rare, however, for a commercial aircraft order to be contingent upon an act of Congress. Most organizing at FedEx currently falls under the Railway Labor Act, which requires companywide employee voting, which is challenging for unions. By contrast, organizing at competitor UPS ( UPS) falls under the National Labor Relations Act, which allows workers to organize on a location-by-location basis. The pending legislation would place much of Fed Ex -- the part not directly connected to its airlines -- under the NLRA.