FedEx CEO argues for continuing unjust status quo
Does he believe this stuff-- or is this a violation of business ethics?
Here's David Bronczek-- in the C-J-- somehow arguing that removing FedEx's artificial advantage is akin to a subsidy for UPS...
Right now in Washington, D.C., Congress is quietly considering another bailout. This new bailout would threaten the stability of the overnight shipping industry and place our already-fragile economy at greater risk.
A dramatic opening...
Earlier this year UPS lobbyists succeeded in having a 230-word provision inserted in the Federal Aviation Authority Reauthorization Act, which was approved by the U.S. House of Representatives in May without one word of public debate. This bailout — and it is a bailout because it benefits one company, UPS, at the expense of another, FedEx Express — would change the labor law that covers our drivers, forcing FedEx Express to radically alter our successful business model. For our customers, this bailout could mean higher costs, less reliable service and diminished access to hard-to-reach markets all so UPS — the largest shipping company in the nation — could unfairly benefit...
Some weird grammar in the last sentence, an odd definition of a "bailout", and some self-serving arguments.
...would move FedEx Express employees from the Railway Labor Act (RLA) to the National Labor Relations Act (NLRA), in defiance of more than 70 years of precedence...
Precedent? Yes. Bad precedence? Yes. So, change it. Precedent-- in and of itself-- is not eminently desirable.
In addition, unlike UPS, FedEx Express was founded as a completely integrated air-ground delivery system...UPS, however, was founded as a trucking company.
How they were founded explains the precedent. How they are run now explains the reason for the change to the status quo.
posted by Eric Schansberg @ 12:55 PM
2 Comments
2 Comments:
Dr. Schansberg:
The way that these 2 companies are "run now" is very different. UPS, in trying to capture some of the overnight market from FedEx, opted to start-up their air division and bundle it and their ground division in order to keep their Brand name uniform as well as keeping costs low. FedEx, on the other hand, bought several different companies in order to compete with UPS on the ground: Watkins Trucking and Victory Trucking became FedEx Freight, RPS became FedEx Ground, Roberts Express became FedEx Logistics, (etc.) and all of these different divisions are operated separately under the FDX Corp. umbrella. This structure was done intentionally in order to keep the Express division (FedEx Express) totally as a stand alone company-the original overnight delivery service.
The precedent cited by Mr. Bronczek (as well as yourself) is one in which the rule should still stand due to the fact that the company has continually, from its inception, operated as an overnight-express transportation provider for time-sensitive commodities that are moved within critical industries such as information-based technologies, pharmaceuticals, aero-space, defense-related industry, government at all levels, manufacturing and even the U.S. mail.
All divisions of FedEx (that I have described above) operate under the NLRA (Wagner Act) except for FedEx Express. The Express division has always operated under the RLA and should continue to do so.
I was in hopes of explaining the differences between the 2 companies so as to inform you as to how they currently operate.
(I was an Econ major back in the day...and hope to perhaps take a class with you in the future)
I have worked for FedEx for 29 years and continually try to explain the differences between it and UPS to those openminded enough to listen and process the pertinent information. There IS a difference.
-Royce Pendley
I'd never heard that about FedEx. Maybe I missed it; if not, that would seem to be an easy, compelling explanation!
So, UPS is a single entity-- and if they had kept things separate, then they would have been able (at least theoretically) to have some of their work under RLA and NLRA?
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