FedEx could cancel Boeing order if Dems change labor law

Reuters:

FedEx Corp will cancel an order to buy 15 Boeing Co jets, as well as an option for a further 15 planes, if Congress passes legislation that makes it easier for FedEx workers to organize under labor unions.

At issue is whether FedEx loses its status under the jurisdiction of the Railway Labor Act, which protects companies from local labor action.

FedEx expects to take delivery of 15 Boeing jets starting this year under an existing contract, spokesman Maury Lane told Reuters. But "30 out of 45 airplanes we won't be buying if our RLA Status is changed by Congress."

The portion of the Boeing order that FedEx cannot cancel totals $2.5 billion, according to a FedEx regulatory filing.

In January, the company exercised an option with Boeing to purchase 15 additional 777 aircraft, and it has an option for another 15 planes. At list prices, 30 such jets are worth about $7.5 billion to Boeing.

The Boeing contract includes language that enables FedEx to cancel the order and the option, if the company's FedEx Express employees are no longer covered by the Railway Labor Act (RLA), which covers airlines as well as railroads.

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Democrats are learning the high cost of their bargain with labor unions. The unions will also pay a price since Boeing workers are also unionized. For Fedex, there should be excess planes already on the market because of cut backs at the air lines and other services. It does put the stark choices out there for everyone to see.