Taking the Hill By Air and Ground

By Del Quentin Wilber and Jeffrey H. Birnbaum
Washington Post Staff Writers
Friday, September 14, 2007

Frederick W. Smith, the founder of FedEx, and Rep. James L. Oberstar (D-Minn.), chairman of the House Transportation Committee, have not been getting along.

A couple of months ago, Oberstar arrived 50 minutes late for a meeting with Smith and then gave Smith just 10 minutes to make his case on pending legislation. After his spiel, Smith said, Oberstar ended the meeting abruptly by saying, "I know all of that, and it doesn't make any difference."

"I was shocked I got treated that way," Smith said. "It was the rudest I've been treated in Congress."

Oberstar said he had been tough but polite and had to cut the meeting short because he had to cast a vote. But, he added, "I guess he's not used to people talking back to him or standing up to him."

The disagreement was more than a clash of personalities. It was also a byproduct of the changed partisan makeup of Congress.

FedEx has long been at odds with organized labor, a close ally of Congress's Democratic majority. For years, Democrats such as Oberstar and unions had been angling for legislation that would open the way for more unionized workers at FedEx.

They finally succeeded in late June when Oberstar's committee approved an amendment that would make it easier for the Teamsters to organize FedEx drivers, a change that the Teamsters had long sought. The amendment is now part of a bill to reauthorize the Federal Aviation Administration, which is expected to come to a vote in the House this month.

The amendment reflects how, as the balance on Capitol Hill tips toward labor, it's specifically tipping toward United Parcel Service, FedEx's larger and more-unionized rival in the package delivery business. "It levels the playing field from our perspective," said Malcolm Berkley, a UPS spokesman.

Both companies are major players in national politics, spending large sums on lobbying and, through their political action committees, on campaign contributions. Among corporations, UPS and FedEx were No. 1 and No. 3, respectively, in PAC giving in the 2006 election cycle.

Each donated roughly a third of its PAC money to Democrats and two-thirds to Republicans in the last election -- a proportion similar to that of many other major companies -- and both have begun to give far more to Democrats this year, which is also a familiar pattern.

But FedEx continues to have rocky relations with Democrats over labor issues. Its ground-delivery unit has been sparring with some of its drivers, who are contractors but want to be treated as full-time employees. FedEx is being sued by scores of its drivers over their status.

The Teamsters want to organize at FedEx, where only 5,000 pilots among more than 200,000 employees and independent contractors in the United States are represented by unions, according to the company. Largely because of federal law, the union faces obstacles at FedEx Express, the company's overnight shipping division, which contributes $22.6 billion of the company's $35 billion in annual revenue. If passed, the amendment would not affect the ability of unions to organize at the company's other units, which are governed by more lax labor laws.

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