FedEx, UPS Brace For Battle On Labor Issue, Despite Delay

Debate has been delayed over a proposed labor provision that has pitted FedEx Corp. (FDX) against United Parcel Service Inc. (UPS), but the two package-delivery heavyweights remain girded for an inevitable fight.

The U.S. Congress last month put off consideration of a bill reauthorizing the Federal Aviation Administration by opting to continue funding the agency through Dec. 31 under its current authorization. The existing FAA bill had been set to expire Sept. 30.

"We're in a marathon," FedEx spokesman Maury Lane said. "This isn't a sprint."

A House version of the reauthorization bill contains a provision - heatedly opposed by FedEx but supported by UPS - that would make it easier for some FedEx truck drivers and other employees to unionize by putting them under the same law governing UPS employees. The provision isn't included in a Senate version.

FedEx launched a high-profile effort over the summer to muster opposition, taking the unusual step of openly attacking a top competitor, namely UPS.

The campaign has included a Web site and videos mocking UPS' "Brown" marketing slogan by describing the provision as a "Brown bailout."

Lane hinted that FedEx has more in store when it appears that Congress is getting closer to debating the issue, saying he's "sure the volume will heat up on both sides."

But he also said FedEx has no plans to let up in the interim on its behind-the-scenes lobbying or its publicity campaign. Among other initiatives, FedEx last week launched a contest on its "Brownbailout.com" Web site, complete with $1,000 prizes, asking people to submit videos describing why they deserve bailouts.

UPS, which has dismissed FedEx's "bailout" characterization as ridiculous, hasn't let up on its lobbying either.

It contends the issue is one of basic fairness, saying employees doing identical jobs should be governed by the same labor laws.

"We're not concerned about this three-month delay (because) we're confident that, sooner or later, Congress is going to address this issue," UPS spokesman Norman Black said.

Black said UPS is "talking to people who will be making this decision" but isn't planning a FedEx-style publicity offensive around its position.

"This isn't a public-opinion poll," he said. "We're not launching any kind of campaign to attack our competitor, such as they have done to us."

-By Bob Sechler, Dow Jones Newswires; 512-394-0285; [e-mail]