I am writing to take strong objection to three points made in your November 1996 Dateline Washington column.
First, you are incorrect to characterise the US/Japan aviation bilateral dispute concerning FedEx as being only a 'parochial' interest. The fact is that the government of Japan, after honouring a treaty with the US for 40 years, began in 1993 unilaterally to refuse to abide by that agreement. This is not just our opinion but is the finding of the US government, as shown by the October 1993 Order from the Department of Transportation concerning our original complaint.
The actions taken by the Japanese government are clearly mercantile in nature and are designed solely to advantage Japanese interests at our expense. While the Japanese may well have legitimate concerns about imbalances in the passenger market, the cargo market is relatively balanced and all FedEx operations and schedules have been in full compliance with the provisions of the US/Japan aviation treaty. Moreover, the sixth freedom traffic opportunities Japanese carriers enjoy are vastly greater than our fifth freedom traffic potential.
The key issue was well stated by Charlene Barchefsky, the acting US trade representative, when she noted that the US must insist on the treaties it signs being honoured, otherwise what is the point in negotiating such treaties?
Thus this dispute transcends the economic interests of FedEx and goes to the heart of the orderly relationship between two of the great trading nations of the world. If the Japanese want to renegotiate or abrogate the treaty, they should do so; but it is simply untenable for the US government to accept this type of egregious unilateral action. It is this fact, rather than any 'parochial' FedEx interest, which has led the US to advise the Japanese that strong countermeasures will be taken if this conduct continues.
Secondly, regarding your comments about the 'express company' language technical correction action taken by Congress in its closing days, I would like to note that this measure was passed with a vote of 66 Senators that included 17 Democrats. If the issue had been close, our government affairs folks believe that there would have been even more voting to rectify this matter.
Those voting for and strongly supporting the bill included Sen Hollings, Democrat from South Carolina (not Tennessee!), the ranking minority member on the Senate Commerce Committee; Sen Wendell Ford, ranking Democrat on the Aviation Subcommittee; and minority leader Daschle. Committee chairmen in both the House and the Senate had clearly stated that the Interstate Commerce Commission legislative actions which deleted the term 'express carrier' had been in error. Moreover, the language itself specifically noted that no carrier's status under the Railway Labor Act was to be changed as a result of the ICC sunset.
The issue of FedEx's designation as a carrier under the Railway Labor Act and our attitudes towards our employees and labor unions is not at all as was depicted by Sen Kennedy. In fact, there are decades of litigation and legal precedence on this matter, not to mention the substantial deliberations of the Congress prior to 1926 when the Act was first established.
The Railway Labor Act requires systemwide collective bargaining units rather than local ones because no major capital-intensive transport system should be held captive to a patchwork of collective bargaining agreements, where a labour dispute in a single location could shut down the entire network.
FedEx employees are legally entitled to seek union representation if they choose, and if they do FedEx will negotiate in good faith with that union. FedEx is not in any way anti-union. On the other hand, we believe that the FedEx People-Service-Profit philosophy is a superior system of employee relations to traditional and inherently adversarial labour-management arrangements.
I should also note that no FedEx employees in Philadelphia have voted to be represented by the United Auto Workers. There was a petition filed with the National Labor Relations Board (NLRB) for an election by the UAW. The systemwide collective bargaining requirements of the RLA make such a petition inappropriate since the National Mediation Board (NMB), not the NLRB, governs such activities.
Finally, your depiction of our political activities as being somehow unseemly, while Sen Kennedy is portrayed as a defender against 'special interest legislation', is very much at odds with the facts. During the floor debate on this, Sen Kennedy maliciously attacked FedEx with virtually no knowledge of our company and certainly no understanding of the Railway Labor Act as it applies to FedEx. Nor is there any indication that Sen Kennedy is well versed on the history of the Railway Labor Act.
For you to fail to note that our political contributions and lobbying activities pale in comparison to the tens of millions of dollars put into political campaigns by organised labour is extremely unfair. Given FedEx's outstanding reputation for employee relations, Sen Kennedy's partisan and uninformed attack was one of the worse abuses of Congressional power that I have ever witnessed.
While I certainly feel that the US political contribution system can and should be reformed, I want to state in the strongest possible terms that all FedEx political activities are in total conformity with the law, and our Political Action Committee contributions, which are bipartisan, support candidates whom we hope hold views similar to ours.
The US electoral system was designed to be a system of competing interests and each such interest can participate as the law permits. Moreover, every US citizen - including a corporation - has the Constitutional right to petition its government for redress of grievances and to be active in the political processes.
It is my opinion, after a great deal of personal involvement in Washington, that political contributions may facilitate one's message being heard, but if the argument being made is not meritorious, no amount of political contributions can dictate a legislative outcome.
This editorial is one of the most one-sided and ill-informed pieces I have ever seen written about our company. I take strong objection to its adversarial tone and lack of balance based on the facts.
Frederick W Smith
Chairman & CEO
Federal Express Corp
Memphis, TN.
Source: Airline Business
