FedEx launches campaign against UPS over FAA bill

* FedEx says FAA reauthorization bill is “bailout” for UPS

* Says bill puts FedEx at a disadvantage

CHICAGO, June 8 (Reuters) - Package delivery company FedEx Corp FDX.N will launch a campaign on Tuesday attacking main rival United Parcel Service Inc UPS.N over a bill in Congress that FedEx said amounts to a bailout for UPS.

The Internet campaign at -- which goes live on Tuesday -- attacks Atlanta-based UPS over a reauthorization bill for the Federal Aviation Administration that was passed by the U.S. House of Representatives in May and awaits Senate approval.

FedEx has previously taken issue with a provision in that bill -- that would have FedEx employees covered by the National Labor Relations Act instead of the Railway Labor Act -- which would make it easier for the Memphis-based company’s employees to unionize locally instead of holding a nationwide vote.

FedEx said this would take away its competitive advantage over UPS, the world’s largest package delivery company.

UPS employees are covered by the NLRA.

The RLA covers airlines and railroads and covers FedEx which started out as an express delivery airline in 1973 before adding trucks.

Representatives of UPS were not immediately available for comment.

The FedEx-backed web site will include a video mocking UPS’ “whiteboard” commercials in which a man illustrates on a whiteboard with brown marker pen the benefits of shipping packages via UPS.

In the FedEx version, the narrator at the whiteboard says that faced with tough competition, UPS could improve its business and modernize.

“Instead how about slipping a few words into an important government bill that gets you a bailout,” the man at the whiteboard asks. “Get them to pass legislation that puts you at a disadvantage.”

“That’s not just a bailout, that’s a bailout with UPS,” the video concludes.

U.S. government bailouts have become increasingly unpopular in recent months, as hundreds of billions of dollars have been spent on shoring up the financial sector in the wake of the U.S. housing crisis.

“Brown bailout” is a reference to UPS’ iconic brown trucks and the uniforms its delivery men and women wear, plus one of the company’s slogans “What can brown do for you?”

The pilots of both companies have union representation.

But while UPS’ drivers are represented by the Teamsters, FedEx’s drivers do not have union representation.

The Teamsters have been trying for years to unionize FedEx workers. The union praised the passing of the reauthorization bill in May.

The FedEx-backed web site said that so far UPS has had to spend $6 billion to “bail itself out of a union pension problem.”

UPS paid a $6.1 billion fee to withdraw from the Central States multi-employer pension fund in 2007 and have some 40,000 employees covered by a single-employer fund jointly managed by UPS and the Teamsters.

UPS’ move was widely regarded by analysts as a smart one, as the Central States fund was widely regarded to be in poor condition.

Earlier this year FedEx said it would cancel an order to buy 15 Boeing Co BA.N airplanes, as well as an option for a further 15 planes if Congress passed the bill.

UPS and FedEx are both considered bellwethers of the U.S. economy. (Reporting by Nick Carey)