ThinkProgress Logo

Economy

FedEx CEO ‘Lobbying Fiercely’ To Preserve Special Treatment That Keeps His Drivers From Unionizing

FedEx CEO Fred Smith

FedEx CEO Fred Smith

Today, the Senate is debating a bill reauthorizing the Federal Aviation Administration (FAA) that had earlier been subjected to a hold by Sen. Bob Corker (R-TN). The FAA reauthoritzation passed by the House last year includes a change in labor law that would remove barriers to unionization for truck drivers at Memphis-based FedEx, and Corker wanted an assurance from Senate Majority Leader Harry Reid (D-NV) that the change would not be included in the final bill (since it is already not included in the Senate language).

Currently, FedEx is governed by the Railway Labor Act (RLA), which does not allow for the formation of local unions, while the change would pull FedEx under the National Labor Relation Act (NLRA) along with other shipping companies like UPS. Reid reportedly promised to keep the language out of the Senate bill, which was enough for Corker to release his hold.

However, it doesn’t seem like the House is prepared to let the case drop. And FedEx CEO Fred Smith — who was George W. Bush’s fraternity brother and has said that “I don’t intend to recognize any unions at Federal Express” — is not taking any chances. He is “lobbying fiercely” today against the change, claiming that allowing FedEx drivers to unionize means medical supplies won’t get delivered on time:

Smith warned that if the measure becomes law, the Memphis, Tenn.-based company would slow its growth — in part by immediately canceling an order of 15 Boeing jets valued in the billions of dollars. It would also cut back significantly in its $2 billion in annual capital expenditures, he said…Smith said FedEx Express depends on the Railway Labor Act for reliability and security. Because the act requires federal government permission for strikes, it allows FedEx Express to avoid local work stoppages — strikes that Smith said could delay shipments of urgent goods such as medical equipment.

Smith added that he “feels confident his company’s supporters could block the bill if it included the labor language the House adopted.”

These are some classic threats that Smith is throwing out: canceled work orders and delayed medical shipments! How terrible! But back in reality, it’s pretty clear that Smith is using exaggerated rhetoric to protect his company’s ability to deny its workers collective bargaining rights.

For starters, I’m not sure who Smith thinks he’s threatening when he says his company will stop trying to grow. That seems like cutting off his nose to spite his face, and presumably it would give his competitors a chance to seize market share. As for the charge about medical supplies, Smith doesn’t seem to have the same concern about his 4,500 already-unionized pilots shutting down everything.

The simple fact remains that current law gives FedEx an unfair advantage and keeps its drivers — who are already systematically misclassified as independent contractors so that FedEx doesn’t have to pay them benefits — from exercising their right to collectively bargain.

Health Insurance Industry Spin: Funding Attack Ads And Newt Gingrich Is Consistent With Supporting Reform

In September, ThinkProgress reported that, despite its public support for health care reform, the insurance industry was engaged in a “duplicitous” campaign to undermine the effort. Recently, the National Journal confirmed our reporting by revealing that six of the top health insurance corporations had secretly pumped up to $20 million dollars into the U.S. Chamber of Commerce for a $100-million-dollar attack ad campaign against health reform last year. This week, insurers purchased a new round of attack ads, again with millions laundered through the Chamber.

It’s not just the Chamber. As we have detailed, the health insurance industry also funds Newt Gingrich’s lobbying firm, which has helped to draft health legislation for Republican lawmakers — including bills aimed at deregulating the health insurance market — and advises GOP leaders on ways to kill reform.

Yesterday at the annual conference for America’s Health Insurance Plans (AHIP), the lobbying juggernaut for the health insurance industry, the industry again falsely claimed that it is fully behind health reform. ThinkProgress spoke to industry spokesman Robert Zirkelbach, who refused to acknowledge any other attack groups the industry may be funding. He also oddly claimed that funding attack ads and Gingrich is somehow consistent with the industry’s promise “to play, to contribute and to help pass health-care reform”:

TP: But you’ve been funding attack ads as well. … But it’s not just your individual members, AHIP funds Newt Gingrich’s group as well, directly. And he’s against health reform, he says ‘let’s kill the bill.’ That’s kind of contradicting your public statements that you support reform. I just don’t understand why you would fund an attack group if you’re really on board.

ZIRKELBACH: I think there’s broad agreement from stakeholders across the board that we need health care reform. But I think there’s also broad agreement that we need health care reform that’s actually going to work and health care reform that’s actually going to bring down health care costs. This legislation doesn’t do that. [...]

TP: But in the spirit of transparency, we didn’t find out about this $20 million dollars you gave to the Chamber to run these attack ads until a month ago, and these things have been going on for a year. So I’m just asking, are there any other groups, other than Newt Gingrich and the Chamber of Commerce that you’re funding, that are attacking health reform? That premium dollars are going to.

ZIRKELBACH: No. … Well, I don’t agree with your premise that we’re funding groups that you know are trying to you know that aren’t trying to make a health care system that’s going to work and bring down costs. [...] Every thing we’ve done throughout this debate has been focused on what can we do to advance health reform.

Watch it:

Former CIGNA executive Wendell Potter, who for years helped the health insurance industry kill reform before becoming a whistle blower, explained that AHIP regularly works behind closed doors to orchestrate a massive right-wing campaign against reform. In the past, health insurers have used third party PR firms to coordinate attack ads, talking points to conservative radio hosts like Rush Limbaugh, and organizing efforts akin to today’s tea parties. As insurers continue to hike premiums for patients across the country, much of that money is not being spent on actual medical care. Instead, up to 20 percent (or 40 percent in the individual market) goes to profits, administrative costs, and lobbying to kill reform.

Update

Progressive Media produced a video alert on the new health insurer-funded, anti-reform ad released by the Chamber of Commerce. Watch it:

Deficit Peacocks McCaskill And Sessions Revive Spending Freeze Amendment That’s Already Failed Twice

deficitpeacocksToday, the Senate plans to consider a bill reauthorizing the Federal Aviation Administration (FAA). The FAA reauthorization had been bogged down by a hold, courtesy of Sen. Bob Corker (R-TN), but Corker announced yesterday that he would release the hold and allow the bill to move forward.

Unfortunately, Corker’s shenanigans aren’t the only ones affecting the FAA bill. An amendment has also been proposed by Sens. Claire McCaskill (D-MO) and Jeff Sessions (R-AL) that would implement a cap on discretionary spending for the next three years, leaving discretionary spending (which accounts for about one-third of the budget) at the fiscal 2010 level through 2013.

McCaskill and Sessions say the measure is intended to reduce the deficit, and call it “substantially similar” to the spending freeze that Obama proposed in his FY2010 budget.

This isn’t the first time that these two have put forth this amendment. It failed once in January, receiving 56 votes, and once more in February, with 59 votes (amendments require 60 votes for adoption). So the measure is one additional yea vote away from passing this time.

While McCaskill and Sessions at least include discretionary defense spending in their freeze (while exempting spending on the current conflicts in Iraq and Afghanistan), the notion that a blanket freeze is a good way to reduce deficits is severely misguided. For one thing, it locks in funding without any debate as to whether current levels are appropriate, and it will limit the ability of the Congress to respond to changing demands (such as the dramatic increase in demand for Pell Grants that followed the economic downturn). As former Labor Secretary Robert Reich has pointed out, this makes it hard “to do much of anything for the middle class that’s important” going forward.

A freeze removes any sense of prioritization from the budget (building effective programs while eliminating ineffective or duplicative ones), and simply whacks away a chunk of funding across the board. As CAP Senior Fellow Scott Lilly has pointed out, programs that are under the radar, but vital to the nation’s functioning, will likely end up on the short end of a freeze. He points to meat inspection and air traffic control, both of which will have to expand in the coming years, as the sort of programs that are taken for granted and will come under the knife.

Because it relies on the FY2010 budget resolution, the McCaskill/Sessions plan is essentially the institutionalization of Obama’s much-ballyhooed three-year spending freeze. It doesn’t address the real problems in the federal budget — which mostly have to do with health care — but it lets lawmakers feel like they’re proactively addressing deficits; it is the very definition of deficit peacockery.

Update

This afternoon, I spoke with Jim Horney, the Director of Federal Fiscal Policy at the Center on Budget and Policy Priorities, and according to some preliminary estimates that he’s made, McCaskill and Sessions’ charge that their cap is similar to Obama’s isn’t true. In fact, their amendment would mandate discretionary spending cuts, beyond what the President proposed, of $66 billion in 2012 and $21.8 billion in 2013.

Switch to Mobile
ThinkProgress Signup Overlay Skip and Continue to ThinkProgress Skip and Continue to ThinkProgress

Sign Up