UPDATE: FedEx To Mount Campaign Vs Bill Viewed As Pro-Union

FedEx Corp. (FDX) is launching what it describes as multimillion-dollar campaign to derail proposed federal legislation that would make it easier for the company's workers to unionize.

The effort targets chief rival United Parcel Service Inc. (UPS) in particular, reiterating FedEx's recent criticism of the bill as a federal bailout for UPS.

Among other things, FedEx refers to the legislation as "a Brown bailout" in its new campaign, a play on UPS's high-profile "Brown" marketing slogan.

UPS, which backs the bill and applauded its approval last month by the U.S. House of Representatives, dismissed FedEx's campaign late Monday as a bid to muddy debate on the issue and simply "raise the noise level" surrounding it.

The FedEx effort includes a Web site - BrownBailout.com that's scheduled to go live Tuesday - as well as plans for television and radio spots. FedEx spokesman Maury Lane characterized the campaign as a full-court press to defeat the legislation.

Lane said the campaign is targeted at anyone who ships or receives packages, as well as the general public. FedEx contends approval of the legislation would increase customer costs by as much as 30%.

"If [people] have a concern about reliability, [and] if they think that profit-laden UPS shouldn't get a legislative bailout, they should call their congressman or senator and talk about it," he said.

If it becomes law, the legislation would remove FedEx Express drivers from the jurisdiction of the Railway Labor Act and put them under jurisdiction of the National Labor Relations Act. The change would allow FedEx drivers to organize on a location-by-location basis, rather than be required to hold a national election.

A nearly identical bill passed the House in 2007 but died in the Senate.

UPS already is governed by the National Labor Relations Act and is heavily unionized, and the company has said the change would simply level the playing field with FedEx in terms of labor costs.

But Lane said the difference in regulatory oversight is appropriate because FedEx originally formed as an airline, rather than a trucking company.

"We're an airline that delivers 85% of our packages using aircraft, [and] they're a trucking company that delivers 85% of their parcels using trucks," Lane said. "You can't shoehorn an airline into [a] trucking company's rules and still expect critical packages to arrive within hours on the other side of the country," he said.

UPS spokesman Norman Black countered that the FedEx argument is based upon faulty logic.

"It would appear that FedEx is preparing to spend millions of dollars trying to convince Congress that a FedEx driver delivering a package is different somehow than a UPS driver delivering a package," Black said in a prepared statement.

"The packages aren't delivered by airplanes, and we don't believe FedEx can fool Congress about that," he said.

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