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FedEx pilots strike pact
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December 18, 1998: 9:16 a.m. ET
After month-long standoff, union and shipping company agree to terms
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NEW YORK (CNNfn) - The board of Federal Express Corp.'s in-house pilots union has reached a tentative pact with company management, ending a month-long standoff during which the pilots threatened to strike during the busy holiday period but backed down in the face of tough retaliatory measures by FedEx.
The FedEx Pilots Association, the union that represents FedEx's 3,600 pilots, will bring the pact before its board and the full union membership for a vote on Dec. 22. FedEx is a unit of Memphis, Tenn.-based FDX Corp (FDX).
The pilots association is the only unionized group at FedEx, the nation's largest cargo airline, specializing in overnight delivery services. A labor accord with management would mark the first collective bargaining pact in the company's 25-year history and put an end to an impasse that had threatened to disrupt deliveries during the high-traffic holiday shopping season.
An initial round of talks between pilots and the shipping company broke down Oct. 30 after the union rejected a contract offering pilots a 17 percent pay raise over five years.
The pilots insisted on a retroactive 5 percent raise and an additional 19 percent raise over the next four years. The pilots also sought additional assurances about retirement pay and benefits. FedEx countered that its offer represented the highest pay concessions the company could afford.
The pilots resumed collective bargaining talks Nov. 20, however, after Federal Express chairman Frederick Smith began scouting about for outside planes and cargo crews to pick up and deliver as a contingency in the event of a strike. Smith also warned the pilots could lose their jobs if they walked out.
The tentative pact reportedly falls short of all of the pilots' original demands, but includes significant improvements in pay, benefits and work rules.
On Wednesday, FDX Corp. said its net income rose 22 percent in its fiscal second quarter, ended Nov. 30, from the comparable period a year ago. FDX posted earnings of $183 million, or $1.23 a diluted share, up from $150 million, or $1 a share, beating Wall Street expectations by 17 cents.
FDX Corp. was created last year through the union of Federal Express and trucking company Caliber System. FedEx currently delivers more than 3 million packages each business day to about 200 countries.
The company reported $15.82 billion in sales in its latest fiscal year, ended May 1998.
Shares of FDX Corp. ended up 4-5/16 at 76-5/16 Thursday on the New York Stock Exchange. 
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FedEx
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