April 20, 2024

UPS Contract Talks Go Down to the Wire as Possible Strike Looms

Less than a week before the contract for more than 325,000 United Parcel Service workers expires, union and company negotiators have yet to reach an agreement to avoid a strike that could derail the American economy.

UPS and the union, the International Brotherhood of Teamsters, have resolved a range of troubling issues, including heat safety and mandatory overtime. But they are still fed up with the wages of part-time workers, who make up more than half of UPS’s union workers.

A strike, which could come as soon as August 1, could have significant consequences for the company, the e-commerce industry and the supply chain.

UPS handles about one quarter of the thousands of packages shipped daily in the United States, according to the Pitney Bowes Parcel Shipping Index. Experts have said competitors don’t have the scale to seamlessly replace that lost capacity.

The Teamsters cited the risks its members took to help generate the company’s strong performance since the pandemic as a reason they deserve big raises. UPS’s adjusted net income increased more than 70 percent between 2019 and last year, to over $11 billion.

The contract talks broke down on July 5 in viuperation. The two sides are set to resume negotiations in the coming days, but the window for an agreement is before the current five-year contract expires.

I Facebook post this month, the union said the company’s latest offer would “leave out” many part-timers, who have jobs such as sorting packages and loading trucks. The post said that “part-timers in many parts of the country earned nearly minimum wage.”

UPS, which says it relies heavily on part-time workers to cope with bursts of activity during the day and to augment its workforce during busier months, said it had proposed significant pay increases before talks broke down. According to the company, part-time employees currently earn about $20 an hour on average after 30 days plus paid time off, health care and pension benefits. The company noted that many part-timers took jobs as full-time drivers, which pay an average of $42 an hour after four years.

The union has gone out of its way to highlight the challenges facing part-time workers. In television interviews and at rallies, the president of the Teamsters, Sean O’Brien, has emphasized what the union calls “part-time poverty” jobs. He was often joined by union leaders and other politicians, including Representative Alexandria Ocasio-Cortez, the New York Democrat.

UPS said Wednesday it was “prepared to increase our industry-leading wages and benefits.” But it is not clear whether the company will meet the union’s demands.

“UPS certainly wants to reach a deal, but not at the expense of its ability to compete in the long term,” said Alan Amling, a former UPS executive and fellow at the University of Tennessee’s Global Supply Chain Institute.

Professor Amling estimated that it would cost the company $850 million a year to increase wages by $5 an hour for all part-time employees represented by the Teamsters.

The company, a usually reports earnings in the second quarter in late July, the report has been delayed this year until after the strike deadline. UPS said the time was within the necessary window to report its earnings and has never published a date other than August 8 for the next release.

The sometimes volatile negotiations began in April, and the Teamsters announced in mid-June that their UPS members had voted, by a 97 percent majority, to authorize a strike.

Less than two weeks later, the union said it was walking away from the table over a “terrible counter-proposal” from the company on cost-of-living increases and adjustments and that a strike “now looks inevitable”.

The two sides resumed their discussions the week before the Fourth of July and soon resolved their most contentious issue: a working class created under the existing contract.

UPS said the arrangement was intended to allow workers to take on dual roles, such as sorting packages some days and driving on others – particularly Saturdays – to keep up with growing demand for weekend delivery.

But the Teamsters said the hybrid idea did not come to fruition, and in practice the new category of workers drove full-time Tuesday through Saturday, but for less pay than other drivers. (The company said some employees were working under the hybrid arrangement.)

Under the agreement reached this month, the lower paid category would be abolished and workers who drove Tuesday to Saturday would be converted to regular full-time drivers.

That agreement also ordered that no driver would have to work the sixth day a week, which drivers sometimes had to do to keep up with Saturday demand.

Despite progress on these issues, Mr O’Brien could face a delicate test in convincing members to approve a deal if it falls short of the high expectations he helped set. He won the union’s top seat in 2021 while regularly criticizing his predecessor, James P. Hoffa, for being too nice to employers.

Mr. O’Brien argued that Mr. Hoffa effectively forced UPS workers to accept a deeply flawed contract in 2018, even after they reduced it, and accused his rival in the race to succeed Mr. Hoffa because he was reluctant to strike against the company.

He began to focus members’ attention on the contract and a possible strike even before he formally took over as president last March, and spoke highly of the union’s goals for a new contract.

“This UPS deal is a defining moment for organized labor,” he told activists with the Teamsters for a Democratic Union, a group that supported his candidacy, in a speech last fall.

The union under Mr O’Brien has been holding training sessions in recent months for strike captains and members of the contract action team, which his colleagues hold to put pressure on the company.

And he strongly urged the White House not to negotiate the treaty. In his youth in Boston, “if two people had a disagreement, and you had nothing to do with it, you just kept walking,” he said recently. webinar with members. “We echoed the White House many times.” (Administration officials have said they are in contact with both sides.)

In some ways the context of this year’s negotiations is similar to the circumstances of the national Teamsters strike at UPS in 1997. UPS was also in the middle. several profitable yearsand the rapid growth of its part-time workforce became significant.

But although a reformed president, Ron Carey, mobilized the union for a fight, its ranks seemed divided between its supporters and those of Mr. Hoffa, who had narrowly lost an election for the presidency of the union the year before. The union may have more leverage this time as its members seem much more united under Mr O’Brien.

Barry Eidlin, a sociologist at McGill University in Montreal who studies labor and follows the Teamsters closely, said that while the ramp up to the current contract fight was lagging in some parts of the country, where more conservative local officials are less enthusiastic, Mr. O’Brien faced no serious opposition within the union.

“Not everyone is a fan of O’Brien, but they are not actively organizing to undermine him like people were with Ron Carey in the ’90s,” said Dr. Eidlin. “It makes a big difference.”

However, for all his pugilistic remarks, Mr O’Brien remains an establishment figure who seems to prefer a deal to a strike, and he has acted subtly to make one less likely.

Earlier in the negotiations, Mr. O’Brien said that UPS employees would not work beyond August 1 without a consolidated contract, and that the two sides would have to reach an agreement by July 5 to give members a chance to approve it in time. But last weekend he said UPS employees would continue to work on Aug. 1 as long as the two sides reached a tentative settlement.

“This is not a change,” a Teamsters spokesman said Friday via email. “This is how you get a contract. The pressure and deadline we have on UPS has forced them to move in ways they haven’t before.”

Niraj Chokshi reporting helped.

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