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FedEx Strike Would Affect Few Workers

November 19, 1998

MEMPHIS, Tenn. (AP) _ A strike by Federal Express Corp. pilots would hurt the company’s reputation and bottom line, but would not shake American business like last year’s walkout at United Parcel Service.

That was the consensus of FedEx customers and management as the company and its pilots remained sharply divided over a new contract.

A strike would disrupt express deliveries by FedEx, but the vast majority of the company’s workers would stay on the job, shipping packages by truck and on other companies’ aircraft. That is a far different situation from the Teamsters strike that virtually shut down UPS for two weeks and much of the country was left scrambling to find a way to deliver packages.

``When UPS went on strike, 98 percent of the people went on strike. Here, 98 percent of the people are on the job,″ said Pat Connolly, a vice president of Williams Sonoma Inc., the San Francisco-based retailer and a major FedEx customer. ``We foresee no delay in service to our customers.″

FedEx has 140,000 employees worldwide. Most appear more supportive of the company than the 3,500 pilots.

Still, the labor unrest has caused concern for FedEx customers and the company itself.

Ted Scherck of the Colography Group, a Marietta, Ga., research company focusing on transportation issues, said many FedEx customers are working on contingency plans in case of a strike.

``But I have not seen any signs that people are actually implementing those strategies yet,″ Scherck said.

FedEx founder Frederick Smith sent an angry e-mail to pilots this week expressing disappointment in the Fedex Pilots Association and warning them that the may lose their jobs in a strike. He also rescinded the company’s last contract offer.

``Our customers are already committing an increasing amount of business to our competitors and our wonderful business reputation is being tarnished,″ wrote Smith, the chairman of FedEx parent FDX Corp.

He vowed ``an unwavering dedication to serving our customers and rebuilding FedEx in the future WITH OR WITHOUT YOU.″

Union leaders said Smith’s e-mail will not make the union back away from its demands for greater job security, control over work rules and a pay raise.

``Fear and intimidation are part of the way FedEx does business,″ union spokesman Tony Hauserman said.

In a news release Thursday, the Air Line Pilots Association, the nation’s largest pilots’ union, expressed support for FedEx pilots, who voted to leave the ALPA in 1996. The ALPA will make available its resources and negotiating expertise to the FedEx pilots, the statement said.

FedEx and its pilots have been haggling over a contract since July. Negotiations broke off Oct. 30 and last week pilots began refusing to work overtime.

The union has mailed strike authorization ballots to its members and if two-thirds approve, union leaders may call for a walkout. The ballots are expected to be counted Dec. 3.

FedEx officials refuse to say what percentage of the company’s packages move by air, but acknowledge ``most″ do.

The company has contingency plans to keep shipments moving during a strike that include a greater reliance on the company’s ground transportation fleet and contract airplanes and crews.

The company says it will continue guaranteeing two- and three-day shipments as well as overnight service to many parts of the country even if the pilots walk.

Since most retailers already have received their inventory for the Christmas season, the FedEx customers hurt most by a walkout would be those who depend on overnight shipments.

Carriers like UPS and DHL Worldwide Express say they will take care of their customers first and then accommodate FedEx customers.

Dave Fonkalsrud, a DHL spokesman, said his company already is talking with FedEx customers, particularly those who ship overseas. FedEx can handle most of its domestic shipping by truck or with fewer planes, although the packages might move a bit slower, he said.

``FedEx would be more vulnerable without pilots in serving international business,″ Fonkalsrud said. ``You can’t drive you trucks across oceans.″

Since the pilots began talking about a strike, FedEx has announced it is considering major changes in its air operations to rely more heavily on contract aircraft and crews.

The last contract offer by the company called for a 17 percent raise over five years. FedEx officials say the raise would put their pilots’ salaries near the top of the airline industry.

The union wants a 24 percent raise over four years and says the company’s claim that FedEx pilots now make an average of $142,000 is inflated.

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