If there was any doubt that Fred Smith is the most important man in US aviation politics, events in early October dispelled them. It was then that the chairman of FedEx Corp decided to reassert his lobbying muscle.
Smith regularly deploys his big guns. In large measure, for instance, it was Smith who encouraged last year's abolition of the Interstate Commerce Commission (ICC) because of FedEx's growing use of truck deliveries in the US. More memorable for airline industry officials were Smith's trips to Capitol Hill during July 1995, in his ultimately successful attempt to redefine rather parochial FedEx concerns (over its access to Japan) into national security terms. Out of this came the US Department of Transportation's first threats of aviation sanctions against Japan, and the first separation of cargo and passenger issues in aviation bilateral negotiations (long a priority for FedEx).
So the fact that Smith did a bit more lobbying raised few eyebrows. But his methods did. With legislators pining to get out of Washington at the end of one of the most combative Congresses in US history, Smith forced the Senate to stay in session until it complied with his desire to keep FedEx as free from unions as possible. Fred Smith has never been intimidated by obstacles, but this is a new level of activism for him, says a senior US transportation official: 'He had Congress holed up and unable to go home. It's quite a testimony to his clout in Washington.'
Like many Washington controversies, this one grew out of the arcane bureaucracy which is used in writing laws. As an 'express company' FedEx has, since its inception, been classified under the Railway Labour Act, not the National Labour Relations Act. The same applies to all airlines although not UPS, primarily a trucking company.
The difference is considerable. Under the National Labour Relations Act, unions may organise locally. Under the Railway Labour Act, organising can only occur on a national scale to keep national systems free of disruptions caused by a local union. As FedEx is based in Tennessee, a 'right to work' state that discourages unions, this legal nicety has helped the company keep its ranks largely union-free, except for the 3,100 pilots in the Air Line Pilots Association.
The problems began last March, when FedEx happened to notice that the legislation that abolished the ICC had also taken out the designation 'express company.' But with that label gone, labour organisers felt they had an opportunity to unionise FedEx truck drivers on a local level. The test case came in Philadelphia, where company drivers had voted last year to join the United Auto Workers.
It was those two words - express company - that riled Fred Smith. With the support of Senate majority leader Trent Lott of Mississippi and Fritz Hollings of Tennessee, FedEx had the label reinserted as part of a $19 billion reauthorisation bill for the Federal Aviation Administration. This angered Democratic senator Ted Kennedy, who saw some campaign potential in attacking the Republican majority's anti-union stance, labelling it 'special interest legislation of the worst kind.' A standoff ensued, but eventually Kennedy was forced down - but only four days after the official recess of Congress.
As intriguing as it was, this lobbying job may by a shallow victory for FedEx and Fred Smith. Along with the win has come intense scrutiny of such special interest tactics. FedEx will not discuss its efforts at swaying Congressional votes, but in 1996 it has spent $1.4 million to influence legislation, according to the Congressional newspaper Roll Call. Most Washington officials will say without hesitation that FedEx is one of the largest corporate campaign donors in the US. The mood is swinging against such heavy-handed influence peddling.
Source: Airline Business
