In 1981, UPS began air services and in the 1990s it tried, legislatively and judicially, to be put under the RLA. In 1993 UPS said all its operations, "including ground operations," are properly subject to the RLA "because the ground operations are part of the air service." FedEx (BEG ITAL)supported(END ITAL) UPS' efforts, even though the vast majority of UPS parcels never go on an airplane, whereas FedEx's trucking operations exist to feed its air fleet and distribute what it carries.
FedEx characterizes itself as the "world's most effective airline" and UPS as "a 100-year old trucking company." FedEx, Smith insists, is not anti-union; its pilots are unionized. He says that the pay and benefits for its drivers are, on average, higher than those of UPS drivers, and that new FedEx drivers must wait only three months to be eligible for benefits whereas UPS drivers must wait a year. Nevertheless, today's Democratic majority in Congress, with UPS now aligned with the Teamsters, wants to put FedEx's ground pickup and delivery operations under the NLRA, thereby making FedEx's entire integrated system susceptible to disruption by local disputes.
"Bailout" is now both a noun and a verb, and FedEx characterizes what Congress might do for UPS as the "Brown Bailout." But properly used, "bailout" denotes a rescue of an economic entity from financial distress. Although UPS is suffering from the recession, so is FedEx. Furthermore, UPS, whose revenue is 36 percent more than FedEx's, began advocating this injury to FedEx long before this recession.
What UPS is doing is called rent-seeking -- bending public power for private advantage by hindering a competitor. This practice, which expands exponentially as government expands arithmetically, is banal but can have entertaining ricochets:
If Congress makes FedEx's operations more precarious by changing the law to make it easier for local disputes to cripple its operations, Smith says a multibillion-dollar order for 15 Boeing 777s will be automatically canceled. One of the unions lobbying on behalf of UPS and the Teamsters is the International Association of Machinists and Aerospace Workers, whose members make 777s.
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