The Next Private Company Target: FedEx

The door has been opened, now it's open season on successful private companies (emphasis mine):

FedEx Express is learning what could be the Democrats' economic motto -- "Never Let Success Go Unpunished."

Led by Rep. James L. Oberstar, Minnesota Democrat, the House on May 21 passed legislation that contains an almost hidden provision -- a mere 230 words -- that would hobble FedEx Express. It would do so by completely changing the labor laws under which the company operates. Unless the Senate removes the language from the underlying bill reauthorizing the Federal Aviation Administration, a mere dozen or so workers in just one city could hamstring much of the nation's overnight delivery service.

We Americans take for granted that things can "absolutely, positively ... be there overnight" -- but it took FedEx Express to make that so. FedEx Express is, of course, one of the great corporate success stories of modern times, having grown from a mere idea in a 1965 term paper by Yale University undergraduate Frederick W. Smith into a company essential to the workings of our modern economy.

It is a little-known fact that FedEx contracts with the U.S. Postal Service to carry almost all of its Express Mail and a large proportion of its Priority Mail. FedEx delivers huge amounts of needed supplies for American military forces, too -- and its service is just about the only way to guarantee that some lifesaving medicines reach patients overnight.

Lawmakers have long recognized that certain sorts of transportation companies are the lifeblood of interstate commerce. That's why they wrote the Railway Labor Act to apply special labor-relations rules to railroads and, eventually, airline-based businesses such as FedEx Express. Since 1926, the RLA has provided successfully for means other than strikes to resolve labor disputes fairly and quickly, without favoring either side.

The RLA does not, however, apply to non-rail, mostly ground-transportation companies such as the United Parcel Service. UPS instead is governed by the National Labor Relations Act (NLRA), the terms of which favor unions such as the Teamsters, which represents UPS drivers. Naturally, this means UPS and the Teamsters both have an interest in kneecapping FedEx Express. Together, the ground-delivery company and the union have executed what The Hill newspaper called a lobbying "pincer movement" to transfer authority over FedEx Express from the RLA to the NLRA.

The UPS corporate political action committee has "given more money to federal lawmakers than any other company over two decades," according to Bloomberg News, with $77,900 from UPS employees going to Mr. Oberstar since 1989. The Teamsters, who lean heavily Democratic, have donated $86,500 to Mr. Oberstar during that period.

Mr. Oberstar argues that he is merely trying to treat similar workers similarly. FedEx Express counters that it and UPS are very different companies. FedEx says it ships 85 percent of its goods by air, whereas UPS sends 85 percent of its goods by truck.

UPS trying to squash FedEx Express is like Goliath sitting on David. Again using FedEx Express numbers, UPS has 425,000 employees in a business doing $49.7 billion in annual revenue, compared to FedEx Express' 143,000 employees and $22.7 billion in revenue. With UPS so much bigger than FedEx Express, it doesn't make sense to argue that "Big Brown" somehow suffers a competitive disadvantage. Indeed, the latest earnings estimate for UPS shows growth from $2.37 to $2.90 per share, while FedEx Corp. has shown a decline from $1.26 to $0.31.

With the economy as a whole so shaky, this is the worst time for Congress to change the rules governing such an important facet of interstate commerce. The old wisdom should apply still: If it ain't broke, don't fix it.

The unions are essentially a wholly owned subsidiary of the Democrat party, and dumped millions upon millions of dollars into Democrat campaigns, especially Obama's.  For the Dems to take aim at private companies through the unions is simple payback.  As we've seen with GM and Chrysler, a union has no interest whatsoever in providing a high quality product, nor in keeping costs low, but rather with institutionalizing its own power and influence.  When the federal government and the unions team up, the company and the consumer always lose.

On a related note, this might be part of the reason for union bullying:

The Wall Street Journal reports today:

As recently as 2000, the [AFL-CIO's] 8.5 million members had a $45 million surplus. By June of last year it had $90.6 million in liabilities, or $2.3 million more than its $88.3 million in assets. … As for the SEIU, as recently as 2002 total SEIU liabilities were about $8 million. According to its 2008 disclosure form, the union owed more than $156 million, a 30% increase over the $120 million it owed in 2007. Its liabilities now equal more than 80% of its $189 million in assets.

The Washington Examiner reported yesterday:

Almost half of the nation's 20 largest unions have pension funds that federal law classifies as "endangered" or in "critical" condition due to being underfunded, an Examiner review of federal actuarial reports shows. … The average union pension has resources to cover only 62 percent of what is owed to participants, according to the Pension Benefit Guarantee Corporation (PBGC). Less than one in every 160 workers is covered by a union pension with required assets.

Unions sap the economic vitality out of every firm they unionize, which is the real reason only 7.6% of private sector workers are unionized. Government, on the other hand, can never go out of business. That is where unionization has exploded over the last 25 years. 36.8% of public sector workers are also union members. But the growth of public sector unions is just not fast enough to cover the pension obligations and operating losses of big labor. They need more young members at the bottom of the pyramid. Huge operating deficits and runaway pension fund liabilities: these are the real driving forces behind big labor's push to pass the Employee Free Choice Act.

I disagree with the above in one aspect - I think government can go out of business.  When hyperinflation makes a currency worthless and the government can no longer carry out its required duties (i.e. national security, enforcing the law, etc...things like welfare or mortgages for illegal aliens don't count as a requirement), the country falls into anarchy or is overtaken by another.  It's out of business on a national scale.  Obama's working in that direction right now.

But back to the unions and their quest for survival.  Muscling out all non-union competition would serve to allow the appearance of profitability because without competition they could charge higher prices to cover the extra costs that come with unionization.  Ultimately, though, it's a never-ending cycle because unions are a parasite that feed on the host organism until the host dies...no matter how big the host is.  The only difference is how long it takes.  We're currently watching the parasite killing GM after a decades-long feeding process.  Chrysler isn't far behind.  Looks like FedEx is in the cross-hairs now, too.

Welcome to Obama's America, where every profitable business is simply a carcass-in-waiting!

There's my two cents.