WASHINGTON, March 15 (Reuters) – FedEx Corp. would stop investing in its core express business if the US government made it easier for its employees to organize into local bargaining units, although that provision will probably not become law, Chief Executive Fred Smith said.

A provision included in sweeping aviation legislation before Congress could enable employees in FedEx's Express unit, which includes its airline, to unionize locally instead of holding a nationwide vote.

The unit accounts for the bulk of the company's revenue,

''If you put different bargaining units in different hubs it would be impossible to run that as an integrated system,'' Smith told reporters. ''If you subject the worldwide FedEx air system to being shut down, it would completely change the nature of the business and our ability to invest in it.''

Congress is slowly moving forward with legislation on long-term US aviation priorities, including plans to modernize the nation's aging air traffic system.

A provision included in the version already approved by the House of Representatives would cause FedEx Express employees to be covered by the National Labor Relations Act, which allows local union organization.

Senate legislation, which lawmakers began considering on Wednesday, does not contain the provision that FedEx opposes.

Whether the measure is included in a final bill will likely come down to a committee of House and Senate negotiators, who will meet after Senate passage to hammer out final details.

Smith said he was confident he had enough political support among both Republicans and Democrats to defeat the measure.

FedEx's Express business, which includes about 660 aircraft and accounted for $22.36 billion of its $35.5 billion in revenue in 2009, is now governed by the Railway Labor Act.

The railway act was enacted almost a century ago to prevent strikes from disrupting the nation's railroads.

Smith founded FedEx in the early 1970s with an emphasis on its express airline but that unit, called Express, now contains such a significant ground component that of its 125,000 US employees, only 4,200 are pilots.

United Parcel Service Inc , the world's largest package delivery service, contends the National Labor Relations Act should govern FedEx Express just as it does UPS since much of the Express unit's business involves trucks and drivers.

''Our position is that all drivers perform the same function and should be treated equally under the law. No company should be granted a competitive advantage under the law,'' said UPS spokesman Malcolm Berkley.

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