UPS Bailout: FedEx's 'Brown Bailout' Media Campaign (VIDEO) (UPDATED)
UPDATED 5:29 p.m.
FedEx has launched a full-fledged attack against a bill that it considers to be a bailout of its competitor, United Parcel Service. Calling the bill a "Brown Bailout," FedEx is hoping to stir populist sentiment against UPS with BrownBailout.com, which features videos of an actor wandering around Washington D.C. asking locals where the government bailout offices are:
The actor, called 'The Brown Bailout Guy,' quips: "I'm looking for my bailout to build a monopoly in the shipping industry."
But buried underneath the media campaign, Politico reports, may be an attempt to prevent FedEx employees from unionizing -- which, incidentally, may be why U.S. Sen. Malcolm Wallop (R-Wyo.), Grover Norquist and National Taxpayers Union President Duane Pard recently signed a pro-UPS letter to FedEx's CEO Fred Smith.
Politico points to a story from May 22 in the Memphis Commercial-Appeal:
"The House passed the $70 billion FAA Reauthorization Act on Thursday with a provision that FedEx adamantly opposes -- making it easier for FedEx Express drivers to be organized by the International Brotherhood of Teamsters. ... It permits drivers for FedEx Express to organize into local collective bargaining units under provisions of the National Labor Relations Act and do away with the requirement that they hold national elections under the terms of the Railway Labor Act. Rival UPS's drivers are already represented by the Teamsters, which hailed the measure's passage."
At the heart of the issue is whether or not FedEx should still be governed under the Railway Labor Act. BrownBailout.com points out that other airlines, railways and shipping companies are regulated under this provision. In other words, should FedEx be considered an airline or a shipping company?
"Lobbyists for UPS - the largest giver to U.S. lawmakers - buried a bailout into the FAA reauthorization bill that would switch FedEx Express from the RLA to the National Labor Relations Act, under which trucking companies like UPS fall. This would force FedEx Express - widely considered one of America's best run companies - to change its business structure. UPS is trying to improve its own market position by creating disruption to its chief competitor."
What do you think? Does the bill amount to a bailout for UPS? Is FedEx being honest about why it opposses the FAA Reautorization Act? Should the government be bailing out shipping companies like UPS?
George Will chimes in on the FedEx-UPS rift in his Washington Post column today. Will's in full support of FedEx's cause, and excoriates the government for even considering a de facto UPS bailout. Here's Will's take:
"What UPS is doing is called rent-seeking -- bending public power for private advantage by hindering a competitor...If Congress makes FedEx's operations more precarious by changing the law to make it easier for local disputes to cripple its operations, Smith says a multibillion-dollar order for 15 Boeing 777s will be automatically canceled. One of the unions lobbying on behalf of UPS and the Teamsters is the International Association of Machinists and Aerospace Workers, whose members make 777s."