A Special Delivery for UPS That Could Change FedEx Overnight
James Sherk /
Special interest handouts are not a pretty sight. Perhaps that is why lawmakers buried their latest one inside the bill reauthorizing the Federal Aviation Administration. Unfortunately putting handouts out of sight does not make them any better for the economy.
At issue is the fierce competition between FedEx and the United Parcel Service (UPS) in the package delivery business. While UPS must collectively bargain with the Teamsters, FedEx remains union free.
FedEx has avoided the costs of collective bargaining primarily by keeping its employees satisfied without union representation. Fortune magazine routinely recognizes the company as one of the best 100 companies to work for. When the recession forced FedEx to cut costs it started with executive salaries before cutting hourly pay – including a 20 percent reduction in CEO Fred Smith’s pay.