Saturday, November 21, 1998

No holiday strike, company and FedEx pilots say

By WOODY BAIRD

Associated Press

MEMPHIS, Tenn. -- Federal Express Corp. pilots agreed Friday to keep working during the holiday season after talk of a possible strike sparked a rally by nonunion workers backing the company and drew a hard line from FedEx's founder.

"The pilots want to assure the customers of Federal Express that absolutely, positively their holiday gifts and packages will be there on time," said Bob Clement, a spokesman for the union representing the company's 3,500 pilots.

Talks between FedEx and the Fedex Pilots Association, which is seeking its first contract, were scheduled to resume Monday. Negotiations began in July but broke off in late October.

The union was scheduled to count strike-authorization ballots from its members on Dec. 3, but Clement said that will be delayed for at least 60 days. Pilots also agreed to resume working overtime.

Union officials did not say why they agreed to new talks and the postponement of the counting of strike-authorization ballots.

In an e-mail sent Tuesday night to pilots, FedEx founder and chairman Frederick Smith warned the company would keep its shipments moving "with or without" them and that their jobs could be in jeopardy.

That same day, about 3,500 nonunion employees at the company's Memphis headquarters staged a rally supporting FedEx and made it clear if the pilots walked out they would continue working. FedEx has more than 140,000 employees worldwide.

Art Hatfield, an analyst with Morgan Keegan & Co. of Memphis, said many pilots are worried the company will make permanent changes in their business operation and have less need for them.

"They didn't have a lot of bargaining power," Hatfield said. "The company was in a much better position than they were, and as a result, you can see what happened."

Preparing for a possible strike, FedEx signed shipping contracts with other airlines that will cost the company more than $100 million over the next six months, The Wall Street Journal reported Friday.

William Margaritis, a FedEx vice president and spokesman, said the "tens of millions of dollars" spent leasing planes and trucks will be taken into consideration in negotiations. He declined to say if that meant pilots could expect smaller pay raises than they might have gotten otherwise.

FedEx says its pilots make an average salary of $142,000 a year, though the union contends that figure is inflated by overtime.

At issue for the pilots is greater job security, more control over work rules and a 24 percent raise over four years. The company had offered a 17 percent raise over five years.

Gary Chaison, a professor of labor relations at Clark University in Worcester, Mass., said the pilots had a hard time gaining public support for a strike. He said pilots are seen by many as an elite employee group looking to pad already high salaries.

FedEx, owned by the FDX Corp., has the world's largest cargo fleet with 326 jets. FDX shares rose $1.87-1/2 to $60.68-3/4 on the New York Stock Exchange.