FedEx May Scrub $7.7 Bln. Order for New Jets
FedEx Corp. said it may not go through with a $7.7 billion purchase of 30 new jet planes for air freight if federal law is changed to make it easier for its employees to join a union, Bloomberg reported.
The company in January exercised an option to buy 15 Boeing 777 planes over the next 10 years and said in regulatory filing Friday that it obtained another option for an additional 15, Bloomberg said.
The total price tag order for 30 jets would total about $7.7 billion.
Following through on those purchases depends on FedEx employees continuing to be under the Railway Labor Act, FedEx 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, Bloomberg reported.
Legislation approved by a U.S. House panel on March 5 would make it easier for drivers of FedEx to vote locally to join unions, by placing the company under the National Labor Relations Act, Bloomberg said.
FedEx rival UPS Inc. backs the proposed change, saying it would even the playing field between the two companies, Bloomberg reported.
A Boeing spokeswoman told the Wall Street Journal the company has not added the 30 planes to its backlog of orders because of the tentative language in the FedEx filing, the Journal reported Wednesday.
