Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, November 21, 1995 TAG: 9511210078
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: Associated Press
DATELINE: MEMPHIS, TENN. LENGTH: Medium
For Federal Express, the timing couldn't be worse.
The Christmas holidays are coming up, and millions of mail-order packages will need to be delivered. And Federal Express finds itself bickering with pilots over a work contract.
The pilots, while not threatening to strike, are talking about work slowdowns that could hamper the company's finely tuned system for time-sensitive, guaranteed deliveries.
The struggle, which actually has been going on since May 1994, is the first big fight for Federal Express over an employee work contract.
The contract talks stalled in October and a 30-day ``cooling-off period'' was ordered to prevent the company or the Air Line Pilots Association from launching strikes, lockouts or other such actions. That cooling-off period ends Saturday.
The two sides resumed talks Monday at the urging of the National Mediation Board.
About half the company's 2,800 pilots are members of the pilots association, which narrowly won certification at Federal Express in 1993.
FedEx spokesman Tom Martin said the company expects most of its pilots to continue working as usual, no matter how the contract negotiations go.
But David Webb, a FedEx pilot and union leader, said the company would be hard-pressed to maintain its delivery schedules if pilots refuse to give the extra effort required of them during the busy holiday season.
``Between 350,000 and 400,000 packages per night during December either will or will not be flown by FedEx pilots volunteering to work extra on their days off,'' Webb said.
The pilots can refuse such overtime and use various other methods to slow down the FedEx system, Webb said.
They might, for example, pay special attention to what ordinarily would be seen as routine maintenance checks, grounding planes longer than usual.
Pilots under federal rules are allowed a ``withdraw of services'' during a labor dispute. While that generally has applied to strikes, it would let a pilot take breaks of an hour or so at time, and those might correspond with scheduled takeoffs of his plane, Webb said.
Federal Express, with 115,000 employees worldwide, delivers nearly 2.4 million items each working day. On its busiest day during last year's holiday season, the company shipped 3.4 million items.
David Guthrie, a securities analyst with Morgan Keegan & Co., said it's difficult to estimate how much trouble a continuing squabble between the company and its pilots might cause.
``They certainly have the potential to be disruptive,'' Guthrie said. ``The company says they have contingency plans, but we don't have any idea ... how effective they will be.''
Guthrie said industry observers are not overly worried the dispute will cause major long-range damage to the company.
``It's tough to get a lot of information on what each side really thinks, because they're both posturing for the other,'' he said.
FedEx managers have argued for years that they can run the company best without having to deal with organized labor. The pilots are the only domestic FedEx employees represented by a union.
FedEx says pay raises, changes in work rules and other demands made by the pilots would cost the company $300 million over the three years of a proposed contract.
``We just think our customers aren't going to fund that kind of increase,'' spokesman Martin said.
On average, FedEx pilots now make $128,000 a year.
The pilots, meanwhile, say the company seeks concessions from them that would cost them $19 million to $40 million.
The pilots want pay raises totaling 17 percent over three years. The company has offered a 4 percent raise in the first year of a three-year contract, with no offer yet for the other two years.
The company had total profits of $298 million for the year.
by CNB