Corporate realpolitik

24 March 2009, 1759 EDT

What should we call this?

FedEx in January announced it had renegotiated a deal to buy 777 Freighters from Boeing over the next decade. The company increased its order to 30 planes from 15 and agreed on an option for another 15 planes.

The labor-related cancellation provision came to light in FedEx’s filing on third quarter earnings. “Our obligation to purchase these additional aircraft is conditioned upon there being no event that causes FedEx or its employees not to be covered by the Railway Labor Act.”

The overwhelming number of commentators on the article see FedEx’s move as a blow on behalf of economic freedom; a kind of first-shot in the revolution against the liberals.

So what is the connection between this battle and ditching Boeing for Airbus? None, really. Airbus is pretty unionized, and few would argue that European labor laws are more pro-corporation than US labor laws

In truth, this is simply corporate extortion. A All FedEx cares about is continuing an unfair advantage over UPS. Because FedEx was founded as an airline, its truck drivers are covered by the Railway Labor Act. UPS is subject to no such quirk. So how to maintain this exemption? Threaten American jobs at another corporation–and unionized ones at that.

It all amounts to a pretty stark demonstration of the stakes of the current battle over the economic policies of the country, and of the correctness of underlying rationale for a new progressive agenda.

(H/t Josh Marshall)

Dan Nexon

Daniel H. Nexon is a Professor at Georgetown University, with a joint appointment in the Department of Government and the School of Foreign Service. His academic work focuses on international-relations theory, power politics, empires and hegemony, and international order. He has also written on the relationship between popular culture and world politics.

He has held fellowships at Stanford University's Center for International Security and Cooperation and at the Ohio State University's Mershon Center for International Studies. During 2009-2010 he worked in the U.S. Department of Defense as a Council on Foreign Relations International Affairs Fellow. He was the lead editor of International Studies Quarterly from 2014-2018.

He is the author of The Struggle for Power in Early Modern Europe: Religious Conflict, Dynastic Empires, and International Change (Princeton University Press, 2009), which won the International Security Studies Section (ISSS) Best Book Award for 2010, and co-author of Exit from Hegemony: The Unraveling of the American Global Order (Oxford University Press, 2020). His articles have appeared in a lot of places. He is the founder of the The Duck of Minerva, and also blogs at Lawyers, Guns and Money.