UPS Labor Talks Stall as Union Balks Over ‘Unacceptable’ Offer
Ian Kullgren
Wed, July 5, 2023
(Bloomberg) -- More than 300,000 United Parcel Service Inc. workers are closer to striking after the company failed to reach an agreement with the International Brotherhood of Teamsters, threatening to plunge the US supply chain into disruption if a deal isn’t reached this month.
Weeks of talks between UPS and the Teamsters fell apart early Wednesday morning in Washington after stretching through the July 4 holiday, with beleaguered negotiators emerging just after 4 a.m. to say the talks had collapsed.
The two sides quickly traded barbs on who was to blame for the breakdown.
“This multibillion-dollar corporation has plenty to give American workers — they just don’t want to,” Teamsters President Sean O’Brien said in a statement. “UPS had a choice to make, and they have clearly chosen to go down the wrong road.”
The union tweeted that the company presented an “unacceptable offer” that “did not address members’ needs.”
In a statement, UPS spokesman Malcolm Berkley said it was the Teamsters who stopped negotiating despite an generous pay offer from the company.
“We have not walked away, and the union has a responsibility to remain at the table,” Berkley said.
Shares of UPS fell 1.6% at 12:21 p.m. in New York. The stock is up about 4% this year.
There is still time to reach a deal. The current labor contract — the largest private-sector union agreement in the US with 330,000 workers — expires at the end of July, but labor leaders have said they need a few weeks to educate their members and persuade them to ratify it. Union employees will not work beyond July 31 when the current contract expires, Teamsters spokeswoman Kara Deniz said. No more bargaining sessions are scheduled.
The Biden administration is in contact with both UPS and the union and remains “optimistic that they can reach a mutually beneficial agreement,” White House spokeswoman Robyn Patterson said.
The high-stakes negotiations had been teetering for several days, with the Teamsters walking away from the bargaining table, insisting a strike was imminent, only to return. They then struck a deal with UPS to eliminate a two-tier wage system that the union said underpaid part-time drivers.
But the two sides ultimately couldn’t agree on larger issues surrounding pay and cost of living increases. Full-time delivery drivers make $95,000 a year, and tractor trailer drivers typically make six figures, according to UPS. But the Teamsters say wages haven’t kept up with the profits the company raked in during the Covid-19 pandemic — or matched the risk workers faced to deliver packages.
Tough Talk
UPS is confronting difficult headwinds with package demand declining and customers looking to claw back the surcharges and price increases that couriers applied liberally during the pandemic. The market weakness compelled one of UPS’s biggest competitors, FedEx Corp., to undertake an effort to slash $4 billion in costs by fiscal 2025 and reap another $2 billion of savings by fiscal 2027 from the restructuring of its networks.
On the Teamsters side, talks were led by O’Brien, who campaigned on taking a tougher stance with UPS than his predecessor, James P. Hoffa. He has lived up to that promise during talks, hurling public insults at the company and practically daring its leaders to call his bluff.
The possible strike adds to a wave labor unrest in the transportation sector over the past couple of years, with a backlog at ports leading to a protracted dispute with West Coast longshoremen and Congress intervening last year to prevent a nationwide rail strike.
--With assistance from Thomas Black, Jordan Fabian and Ryan Beene.
Stalemate: UPS, Teamsters contract talks break down with each side blaming the other
United Parcel Service driver Hudson de Almeida steers through a neighborhood while delivering packages, Friday, June 30, 2023, in Haverhill, Mass. Frustrated by what he called an "appalling counterproposal" earlier this week, Teamsters General President Sean O'Brien, the head of the union representing 340,000 UPS workers, said a strike now appears inevitable and gave the shipping giant a Friday deadline to improve its offer.
United Parcel Service driver Hudson de Almeida steers through a neighborhood while delivering packages, Friday, June 30, 2023, in Haverhill, Mass. Frustrated by what he called an "appalling counterproposal" earlier this week, Teamsters General President Sean O'Brien, the head of the union representing 340,000 UPS workers, said a strike now appears inevitable and gave the shipping giant a Friday deadline to improve its offer.
(AP Photo/Charles Krupa)
MATT OTT
Wed, July 5, 2023
Contract negotiations between UPS and the union representing 340,000 of the company's workers broke down early Wednesday with each side blaming the other for walking away from talks.
The Teamsters have imposed several deadlines for United Parcel Service negotiators to make their “last, best and final” offer to its unionized workers in recent days. Union officials said Wednesday that UPS “walked away from the bargaining table after presenting an unacceptable offer," specifically with regard to the economic package.
UPS told a different story. The package delivery company said it was the Teamsters who abandoned negotiations, “despite UPS’s historic offer that builds on our industry-leading pay.”
“We have not walked away, and the union has a responsibility to remain at the table,” the Atlanta company said in a prepared statement.
Whichever the case, talks are at a stalemate with the end of the contract — midnight on July 31 — rapidly approaching. Teamster-represented UPS workers voted for a strike authorization last month and union chief Sean O’Brien said last week that a strike was imminent.
The Teamsters say any tentative agreement would need to be endorsed by its national committee before being disseminated and voted on by membership. The union has said it will not negotiate past the expiration of the current contract.
Shares of United Parcel Service Inc. fell more than 2%. Shares in rival FedEx rose slightly.
The Teamsters represent more than half of the company’s workforce in the largest private-sector contract in North America. If a strike occurs, it would be the first since a 15-day walkout by 185,000 workers crippled the company a quarter century ago.
UPS has grown vastly since then and become even more integral piece of the U.S. economy, with consumers relying on swift delivery of most essential home items. Small businesses who rely on UPS could also be left looking for alternative shipping options if the company's remaining workforce wasn't able to meet demand during a strike.
The company says it delivers the equivalent of about 6% of nation’s gross domestic product. That means a strike would carry with it potentially far-reaching implications for the economy, particularly the supply chain, which has just begun to recover from pandemic-related entanglements.
Negotiations had appeared to be progressing in recent weeks, with tentative agreements on a number of issues since national contract talks began in April. The sides agreed to scrap the two-tier wage system for drivers who work weekends and earn less money, which was a major sticking point.
The union also said it also reached a tentative agreement to establish Martin Luther King Jr. Day as a full holiday for the first time and end unwanted overtime on drivers’ days off.
Last month, the union and the company reached another tentative agreement to equip more trucks with air conditioning equipment. Under that agreement, UPS said it would add air conditioning to U.S. small delivery vehicles purchased after January 1, 2024. Existing vehicles wouldn’t get that upgrade, but the union said they will have other additions like two fans and air vents.
Annual profits at UPS in the past two years are close to three times what they were pre-pandemic. The company returned about $8.6 billion to shareholders in the form of dividends and stock buybacks in 2022, and forecasts another $8.4 billion for shareholders this year.
——
Haleluya Hadero contributed to this report from New York. Ott reported from Silver Spring, Md.
MATT OTT
Wed, July 5, 2023
Contract negotiations between UPS and the union representing 340,000 of the company's workers broke down early Wednesday with each side blaming the other for walking away from talks.
The Teamsters have imposed several deadlines for United Parcel Service negotiators to make their “last, best and final” offer to its unionized workers in recent days. Union officials said Wednesday that UPS “walked away from the bargaining table after presenting an unacceptable offer," specifically with regard to the economic package.
UPS told a different story. The package delivery company said it was the Teamsters who abandoned negotiations, “despite UPS’s historic offer that builds on our industry-leading pay.”
“We have not walked away, and the union has a responsibility to remain at the table,” the Atlanta company said in a prepared statement.
Whichever the case, talks are at a stalemate with the end of the contract — midnight on July 31 — rapidly approaching. Teamster-represented UPS workers voted for a strike authorization last month and union chief Sean O’Brien said last week that a strike was imminent.
The Teamsters say any tentative agreement would need to be endorsed by its national committee before being disseminated and voted on by membership. The union has said it will not negotiate past the expiration of the current contract.
Shares of United Parcel Service Inc. fell more than 2%. Shares in rival FedEx rose slightly.
The Teamsters represent more than half of the company’s workforce in the largest private-sector contract in North America. If a strike occurs, it would be the first since a 15-day walkout by 185,000 workers crippled the company a quarter century ago.
UPS has grown vastly since then and become even more integral piece of the U.S. economy, with consumers relying on swift delivery of most essential home items. Small businesses who rely on UPS could also be left looking for alternative shipping options if the company's remaining workforce wasn't able to meet demand during a strike.
The company says it delivers the equivalent of about 6% of nation’s gross domestic product. That means a strike would carry with it potentially far-reaching implications for the economy, particularly the supply chain, which has just begun to recover from pandemic-related entanglements.
Negotiations had appeared to be progressing in recent weeks, with tentative agreements on a number of issues since national contract talks began in April. The sides agreed to scrap the two-tier wage system for drivers who work weekends and earn less money, which was a major sticking point.
The union also said it also reached a tentative agreement to establish Martin Luther King Jr. Day as a full holiday for the first time and end unwanted overtime on drivers’ days off.
Last month, the union and the company reached another tentative agreement to equip more trucks with air conditioning equipment. Under that agreement, UPS said it would add air conditioning to U.S. small delivery vehicles purchased after January 1, 2024. Existing vehicles wouldn’t get that upgrade, but the union said they will have other additions like two fans and air vents.
Annual profits at UPS in the past two years are close to three times what they were pre-pandemic. The company returned about $8.6 billion to shareholders in the form of dividends and stock buybacks in 2022, and forecasts another $8.4 billion for shareholders this year.
——
Haleluya Hadero contributed to this report from New York. Ott reported from Silver Spring, Md.
Courtney Francisco
Wed, July 5, 2023
Local UPS stores are bracing for potential delays and setbacks as UPS contract negotiations with drivers and box handlers ended Wednesday.
Both UPS and UPS Teamsters National Negotiation Committee accused each other of walking away from the bargaining table Wednesday.
If the pair fail to agree on a new contract, hundreds of thousands of UPS workers could strike by August.
The UPS Teamsters contract covers more than 340,000 full- and part-time workers who drive semi-trucks, delivery trucks and handle boxes. The union renegotiates its contract with UPS every five years, according to the Sandy Springs-based company.
This contract is scheduled to end on July 31. Locally owned UPS stores are bracing for potential delays and backlogs.
“I’m really nervous for our business, in part, as well as for these drivers who really work hard,” said Sabrina Harris.
Harris is an Assistant Manager at a Brookhaven delivery and drop-off point.
“It’s going to affect all of us. It’s going to affect restaurants, stores, and it’s really scary,” said Harris.
UPS and the Teamsters have been negotiating since April. A UPS Spokesperson said until Wednesday, both sides reached agreements on more than 50 contract topics unrelated to money.
For example, UPS agreed to make MLK Day a holiday. They also agreed to put air conditioning on the delivery trucks.
Wednesday, Teamsters said progress stopped because UPS said it had nothing more to give.
“This multibillion-dollar corporation has plenty to give American workers — they just don’t want to,” said Teamsters General President Sean M. O’Brien. “UPS had a choice to make, and they have clearly chosen to go down the wrong road.”
A statement from UPS said, “The Teamsters have stopped negotiating despite historic proposals that build on our industry-leading pay. We have nearly a month left to negotiate. We have not walked away, and the union has a responsibility to remain at the table.”
“So many lives will be affected if this does not get resolved and really quickly before the end of this month,” said Harris.
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