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

With just over a week to go until the contracts of more than 325,000 United Parcel Service employees expire, unions and company negotiators have yet to reach a deal to avoid a strike that could stall the American economy.

UPS and its union, the International Brotherhood of Teamsters, have solved a variety of thorny issues such as heat safety and mandatory overtime. But wages for part-time workers, who make up more than half of UPS’s union membership, remain stuck.

A strike could take place as early as August 1, which could seriously affect the company, the e-commerce industry and its supply chain.

UPS handles about a quarter of the tens of millions of packages shipped daily in the United States, according to the Pitney Bowes Parcel Shipment Index. Experts say competitors don’t have the scale to seamlessly replace lost capacity.

Teamsters cites the risks members took to create the company’s strong performance during the pandemic as the reason it deserves a big raise. UPS’s adjusted net income grew more than 70% from 2019 to last year, surpassing $11 billion.

Contract negotiations unfairly broke down on July 5. The two sides plan to resume talks in the next few days, but the time to reach an agreement before the current five-year deal expires is tight.

and facebook post The union said earlier this month that the company’s latest proposal would “left behind” many part-timers with jobs such as sorting packages and loading trucks. The post said part-timers earn “close to minimum wage in many parts of the country.”

UPS said it relied heavily on part-time workers to handle the surge in daily activity and ramp up its workforce during busy periods, and said it had offered significant wage increases before negotiations broke down. Part-time workers now earn an average of about $20 an hour after 30 days, plus paid vacation, medical insurance and pension benefits, according to the company. The company noted that many part-timers graduate and find employment as full-time drivers, making an average of $42 an hour after four years.

Unions have done their best to highlight the challenges faced by part-time workers. In television interviews and rallies, Teamsters president Sean O’Brien emphasized: union call “Part-time poverty” jobs. He is also frequented by other union leaders and politicians, including Rep. Alexandria Ocasio-Cortez of the New York Democratic Party.

UPS said Wednesday it is “ready to increase industry-leading salaries and benefits.” However, it is unclear whether the company will comply with the union’s demands.

“UPS certainly wants to reach a deal, but they don’t want to sacrifice their ability to compete in the long run,” said Alan Amling, a former UPS executive and research fellow at the University of Tennessee Global Supply Chain Institute.

Professor Amling estimates that it would cost the company $850 million a year to raise the wages of all part-time workers, represented by Teamster, by $5 an hour.

The company report as normal This year’s report was postponed until after the strike deadline, as it announced its second-quarter results in late July. UPS said the timing is within the framework required for earnings reporting and that it has never announced a date other than August 8 for future releases.

Negotiations, at times rocky, began in April, and Teamsters announced in mid-June that UPS members had voted in favor of the strike approval with a 97 percent majority.

Less than two weeks later, unions pulled out of the bargaining table over a “surprising counteroffer” from the company on salary increases and cost-of-living adjustments, saying a strike “now seems inevitable”.

The two countries resumed talks the week before Independence Day and quickly settled perhaps the most controversial issue: the class of workers created under existing contracts.

According to UPS, the arrangement is intended to allow employees to play dual roles, such as sorting packages one day and driving another day, especially on Saturdays, to meet increased demand for weekend deliveries.

Teamsters, however, said the hybrid idea never materialized and that in reality the new category of workers just drove full-time from Tuesday to Saturday and were paid less than other drivers. (The company said some employees were working in a hybrid fashion.)

An agreement reached this month would eliminate the low-wage category and convert workers who used to drive from Tuesday to Saturday into regular full-time drivers.

The agreement also stipulated that drivers were not required to work unscheduled six days a week, although drivers sometimes had to do so to meet demand on Saturdays.

Despite progress on these issues, O’Brien could face a delicate test of persuading member states to approve the deal if it falls short of the high expectations he helped set. He took the union top spot in 2021 while regularly criticizing his immediate predecessor James P. Hoffa for being too lenient with employers.

O’Brien alleged that Hoffa effectively forced UPS employees to accept materially flawed contracts even after they rejected them in 2018. blamed his rival This is because he was reluctant to go on strike with the company over the dispute over Hoffa’s successor.

Even before he officially took over as president last March, he began to focus the attention of union members on the contract and the possibility of a strike, and spoke in the best terms of the union’s goals for a new deal.

“This UPS deal will be a defining moment for organized labor,” he told activists at the Democratic Alliance Teamsters group that backed his candidacy last fall.

In recent months, Mr. O’Brien’s union has held training sessions for strike chiefs and contract action team members, who have rallied their colleagues to put pressure on the company.

And he urged the White House not to interfere in contract negotiations. As a young man in Boston, “even if we disagreed and it had nothing to do with me, I just kept walking,” he said in a recent speech. webinar with the members. “We have repeated that to the White House many times.”

In some ways, this year’s negotiating situation resembles that of the nationwide Teamsters strike at UPS in 1997. UPS was also in the thick of it. profitable yearsa rapid increase in the part-time workforce loomed.

But while reformist President Ron Carey rallied the unions to the fight, the class appeared to be divided between his supporters and those of Mr Hoffa, who had narrowly lost the election for union president the previous year. Union members seem much more united under Mr O’Brien, so the union’s clout could be even greater this time around.

Barry Eidlin, a sociologist at McGill University in Montreal who studies labor and closely observes the Teamsters, said O’Brien faced no serious opposition within the union, although some parts of the country have been slow to tackle the current contract battle where conservative local officials are less enthusiastic.

“Not everyone is an O’Brien fan, but they’re not actively organizing to demean O’Brien like people were to Ron Carey in the ’90s,” Dr Idlin said. “That’s a very big difference.”

Yet, despite all the punitive rhetoric, Mr. O’Brien remains an establishment figure who prefers to reach agreements over strikes, and has acted subtly to make strikes less likely.

Earlier in the negotiations, Mr. O’Brien said UPS employees could not work after August 1 without an approved contract, and said the two sides needed to reach an agreement by July 5 to give members a chance to approve in time. But last weekend, he said UPS employees would continue to work through August 1 as long as the two sides reach a tentative agreement.

“This is not a shift,” a Teamsters spokesperson said in an email Friday. “That’s how you get a deal. Our pressure and deadlines for UPS have forced UPS to act in ways it has never done before.”

Niraj Chokshi Contributed to the report.

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