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A 'Brown Bailout' for UPS is more like a FedEx shackling

July 23, 2010 |  4:35 pm

UpsWhat can brown do for you? Some think it should be: What can your government do for brown?

Opposition to an otherwise innocuous reauthorization bill from the Federal Aviation Administration is showing up around the web. The United Parcel Service of America is being accused of lobbying Congress to grant the international corporation a government bailout.

Of course, what's actually going on doesn't exactly fit the definition of a bailout as we know it. The government wouldn't simply hand over any money to UPS, as it did for the financial and auto industries.

Much of the backlash seems to have been scared up by FedEx, the largest competitor to UPS. FedEx launched the multi-million-dollar online campaign last month, backed by a website called BrownBailout.com -- "brought to you by FedEx Express," reads a statement on the site's footer.

It's easy to see why the company is staging a campaign in opposition. The bill sort of targets FedEx.

The legislation would enable FedEx workers to unionize locally rather than nationally by changing which federal act the company's employees are covered under. Such a move could benefit FedEx employees but hurt the company's bottom line. FedEx says the government is "playing favorites."

But is it a bailout, per se?

Merriam-Webster defines a bailout as: "a rescue from financial distress." The dictionary doesn't specify that it must be a monetary rescue; however, financially afflicted UPS is not. It's the No. 1 package delivery service, with a $63 billion market cap and a 4.5% profit margin in the first quarter of the year.

Still, a Wall Street Journal op-ed argues that the bill is anticompetitive:

This is political favoritism at its worst, benefiting only UPS and the Teamsters while raising transportation costs across the economy. FedEx has been able to break a decades-long UPS monopoly in parcel delivery, reducing costs for millions of customers.

-- Mark Milian

twitter.com/markmilian

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Photo: A United Parcel Service driver delivers packages Thursday in Glendale, Calif. Credit: Kevork Djansezian / Getty Images

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