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FedEx Corp., the second-largest U.S. package-shipping company, said it may not buy 30 more Boeing Co. 777 freighters should federal law be changed to make it easier for its employees to join a union.
FedEx in January exercised an option to buy 15 of the planes during the next decade and said in March 20 regulatory filing that it obtained another option for an additional 15. At the list price, 30 of the aircraft are valued at $7.7 billion.
Following through on those purchases depends on FedEx employees continuing to be under the Railway Labor Act, the company said in the filing. That law, which covers FedEx workers because the company was founded as an airline, requires a national vote if employees want union representation.
Legislation approved by a U.S. House panel on March 5 would make it easier for drivers of Memphis, Tennessee-based FedEx to vote locally to join unions, by placing the company under the National Labor Relations Act. FedEx's larger rival, United Parcel Service Inc., backs the proposed change, saying it would even the playing field between the two companies.
About half of UPS's employees belong to the Teamsters union, while FedEx's only unionized group is its pilots. The Teamsters have been trying to win representation of FedEx drivers for years.
"If the regulatory and congressional environment remains hostile, there is virtual uncertainty over how we'd proceed," FedEx spokesman Maury Lane said today. The change would "stymie competition and create an economic roadblock to recovery," he said.
"FedEx is an important Boeing customer and we understand the company's concerns about the proposed legislation," said Jim Proulx, a Boeing spokesman. The Chicago-based company hasn't taken a position on the bill provision that would affect FedEx workers, he said.
Boeing hasn't added FedEx's first group of 15 options to its firm backlog because of the provision, and the second group has no definitive date, he said.
The Wall Street Journal reported FedEx's plans regarding the planes earlier today.

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