FedEx US labour trouble

FEDEX is to cut 1,000 employee jobs before the end of May. According to FedEx spokesperson Maury Lane, the cuts will be spread across all of the company’s subsidiaries.

“Our financial performance was sharply lower during the quarter due to the global recession,” said Frederick Smith, FedEx’s chairman, president and chief executive officer. “While we are gaining market share in all of our transportation segments, the downturn in our industry and the severity and expected duration of the recession require that we take additional actions.”

FedEx is also facing criticism for ‘threatening’ Congress over proposed employment laws by withholding the purchase of 30 new Boeing 777 cargo planes.

A bill currently in front of Congress is suggesting that FedEx Express should be reclassified under a different labour law. Currently, it is under the jurisdiction of the National Railway Labor Act instead of the National Labor Relations Act. Should the bill go ahead then the company’s employees will find it easier to form and join unions, a situation that FedEx says will severely hamper its ability to adapt and survive in the current economic difficulties and make it prohibitively expensive to purchase the 777s.

“This notice gives Congress a chance to protect jobs instead of killing jobs,” said Lane. “This is a prudent business decision based on a potentially devastating Congressional decision.

“If this happens we will have to make changes with serious ramifications,” he said. “We hope [Congress] makes the right decision.”

It has been suggested that FedEx would likely spend the US$6 billion on buying Airbus aircraft instead.