UPS contract talks go to the wire due to possible strike fears

UPS contract talks go to the wire due to possible strike fears

Barely a week before the contract of more than 325,000 United Parcel Service workers is due to expire, union and company negotiators have yet to reach an agreement to avert a strike that could derail the US economy.

UPS and the union, the International Brotherhood of Teamsters, have resolved a number of complex issues including heat safety and forced overtime. But they remain deadlocked over pay for part-time workers, who account for more than half of union workers at UPS.

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

According to the Pitney Bowes Parcel Shipping Index, UPS handles about one-quarter of the millions of packages shipped daily in the United States. Experts have said competitors lack the scale to seamlessly replace that lost capacity.

Teamsters have said they deserve bigger pay raises, citing the risks taken by its members to help generate the company’s strong pandemic-era performance. UPS’s adjusted net income grew more than 70 percent between 2019 and last year to more than $11 billion.

Contract talks broke down in disgrace on 5 July. The two sides are to resume talks in the coming days, but there is little chance of an agreement before the current five-year contract expires.

one in facebook post This month, the union said the company’s latest offering would “leave behind” many part-timers whose jobs include sorting packages and loading trucks. The post said that part-time workers earn “almost minimum wage in many parts of the country”.

UPS, which says it relies heavily on part-timers to handle day-to-day activities and augment its workforce during busy months, said it had proposed significant pay increases before talks broke down. According to the company, part-time workers currently earn an average of about $20 an hour after 30 days, plus they receive vacation, health care and pension benefits. The company noted that many part-timers graduated to 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 faced by part-time workers. In televised interviews and rallies, Teamsters president Sean O’Brien has emphasized that union call “Part Time Poverty” Jobs. He has often been joined by other union leaders and politicians, including New York Democrat Representative Alexandria Ocasio-Cortez.

UPS said Wednesday that it is “ready to raise our industry-leading pay and benefits.” But it is not clear whether the company will meet the union’s demands.

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

Professor Amling estimated that raising wages by $5 per hour for all part-time workers represented by the Teamsters would cost the company $850 million a year.

company, which usually reports It has delayed reporting its second-quarter earnings at the end of July until after the strike deadline this year. UPS said the timing was within the required window to report its earnings and had never published a date other than August 8 for an upcoming release.

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

Less than two weeks later, the union said it was walking off the table over the company’s “terrible counteroffer” on raises and cost-of-living adjustments and that a strike “now appears inevitable.”

The two sides resumed their discussions a week before the Fourth of July and soon resolved what was perhaps their most contentious issue: creating a class of workers under existing contracts.

UPS said the arrangement is intended to allow workers to perform a dual role, such as sorting packages on some days and driving on other days — especially Saturdays — in order to meet increased demand for weekend deliveries.

But the Teamsters said the hybrid idea did not come to pass, and in practice the new category of workers drove full time from Tuesday to Saturday, only at less pay than other drivers. (The company said some employees worked under hybrid arrangements.)

Under the agreement reached this month, the low-paying category will be eliminated and workers who drive Tuesday through Saturday will be converted into regular full-time drivers.

That agreement also stipulated that no driver would be required to work an unscheduled sixth day a week, which drivers were sometimes forced to do to meet Saturday demands.

Despite progress on these issues, Mr O’Brien could face a delicate test in persuading members to approve a deal if it falls short of the high hopes he helped set up. He won the union’s top job in 2021 after regularly criticizing his predecessor, James P. Hoffa, for being overly lenient to employers.

Mr. O’Brien argued that Mr. Hoffa had effectively forced UPS employees to accept a grossly flawed contract in 2018, even though they had rejected it, and accuse your opponent In the running to succeed Mr. Hoffa because of his reluctance to strike against the company.

He began focusing members’ attention on the contract and a possible strike even before he formally took over as president in March last year, speaking glowingly about the union’s goals for the new contract.

“This UPS agreement is going to be a defining moment in organized labor,” he told workers from Teamsters for a Democratic Union, a group that endorsed his candidacy, in a speech last autumn.

The union, under Mr O’Brien’s leadership, has in recent months held training sessions for strike captains and contract action team members, uniting co-workers to help put pressure on the company.

And he has strongly urged the White House not to engage in contract negotiations. In his Boston youth, “if two people had a disagreement, and you had nothing to do with it, you just walked away,” he said during a recent event. webinar with the members. “We pointed this out to the White House on several occasions.” (Administration officials have said they are in contact with both sides.)

In some ways the context of this year’s talks resembles the circumstances of the nationwide Teamsters strike at UPS in 1997. UPS was in the middle of it too. many profitable yearsAnd the rapid growth in its part-time workforce threatens to loom large.

But while Ron Kerry, a reformist president, rallied the union to battle, its ranks appeared divided between his supporters and those of Mr. Hoffa, who had narrowly lost the union’s presidency a year earlier. The union may gain more this time as its members appear to be far more unified 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 current contract fight has been delayed in parts of the country where more conservative local officials are less enthusiastic, Mr. O’Brien had no serious opposition within the union.

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

Yet, despite all his idiosyncratic statements, Mr O’Brien remains an established figure who prefers to reach a settlement rather than go on strike, and he has done a fine job of downplaying one possibility.

Earlier in the talks, Mr. O’Brien said UPS workers would not work beyond August 1 without a ratified contract, and that the two sides needed to reach an agreement by July 5 to give members a chance to ratify it in time. But last weekend he said UPS employees would continue to work on Aug. 1 until the two sides reach a tentative agreement.

“This is not a change,” a Teamsters spokesperson said by email Friday. “That’s how you get contracts. Our pressure and deadlines on UPS forced them to move in ways they hadn’t before.

-Neeraj Choksi Contributed reporting.

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