Memory of 1997 Strike Strengthens Union’s Position: UPS and Teamsters Working for (Very) Early Contract Settlement
The 1997 Teamsters strike against UPS was one of the biggest events for U.S. labor in the 1990s. Relying on rank-and-file member mobilization, innovative tactics, and a campaign that captured public support, the Teamsters (IBT) won a victory that buoyed union morale far and wide.
Though the current UPS master contract is set to expire more than a year from now on August 1, 2008, Teamster officials opened up early negotiations with the company last year. Ken Hall, director of the Teamsters small package division, even announced recently that a possible settlement could be on the table as early as next month.
The impact of an early settlement could ripple out far beyond the world’s largest transportation corporation. Major contract issues are familiar to many North American workers: restoring retiree health care; improving and protecting pensions; and extending unionization to UPS Freight, formerly Overnite Transportation.
Shopfloor concerns are also hot topics in the contract talks. “Protecting UPS members’ pensions and protecting health care for retirees and workers are the top priorities,” said Hall in a February press release. “But many critical non-economic items, such as safety and health, working conditions, subcontracting, the company’s use of technology, among other issues, are on the table as well.”
A showdown over these issues may once again set the bargaining tone, positively or negatively, for many private-sector unions for years to come.
BIG BROWN
UPS’s heavyweight status in the economy and U.S. labor movement underscore the significance of these negotiations. UPS is one of the nation’s biggest employers, with 407,000 union and non-union employees, and one of the world’s leading companies in three related industries: delivery, logistics, and freight.
Importantly, its workforce is also still considered a stronghold for U.S. unions in the private sector. The master contract is now the largest private-sector collective bargaining agreement in the country—covering 215,000 Teamsters.
UPS is also a key bastion inside a larger unionized stronghold. Mostly immune to threats of offshoring, transportation and warehousing workers are three times more likely to be union members then their counterparts in the private sector. While union density dropped to 7.4 percent in the private sector as a whole in 2006, union membership has stayed at 22.2 percent in the industry.
RECOVERING GROUND
Though hailed as “The Best Contract Ever” by IBT officials in 2002, the last UPS contract did not produce a clear-cut victory for UPS workers as the 1997 strike did.
Unlike many employers demanding concessions, UPS has remained highly profitable for years. From 2002 to 2006, the company went from making a healthy $5 billion to $6.5 billion per year in before-tax net income.
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Despite its soaring profits, the company used less of its budget to compensate workers during the last contract’s span. Wages and benefits as a percentage of revenue fell from 57 percent in 2002 to 53 percent in 2006, according to Make UPS Deliver, a campaign organized by Teamsters for a Democratic Union (TDU) to help build rank-and-file participation and support for the union during negotiations.
While wages remained at living wage levels for some full-time employees from 2002 to 2006, those at the bottom took a beating. UPS part timers’ base wage remained a paltry $8.50/hour throughout the life of the contract.
UPS workers in multi-employer pension funds jointly administered by the union have seen cuts in their pension accruals since 2002. Retiree health care benefits are reportedly in even worse shape in Teamster funds like the Central States Pension Fund.
UNION COUNTER CHARGE
Given the importance of these negotiations, it seems critical that the Teamsters build enough momentum, leverage, and member power to make some gains at UPS.
IBT international officials like Ken Hall are projecting confidence. “We refuse to ask our members to ratify any agreement that falls short of protecting their pensions and health care, and one that does not address the other important issues,” said Hall.
IBT officials are undoubtedly hoping that UPS is looking to settle early and maintain “labor peace” to stave off growing competition in the industry. Business analyst Edward Wolfe recently predicted that UPS’s non-union competitors, such as FedEx, may start eating into UPS’s market share. Wolfe believes that, in the absence of an early labor agreement, package volumes will start falling by the last quarter of 2007 and may remain down until as late as 2009.
Rank-and-file activists are looking to add member power to the union’s strategy. The “Make UPS Deliver” campaign has emphasized educating and ramping up members for the fight.
Make UPS Deliver has focused on bargaining goals similar to Hall’s: raising UPS’s pension contributions; including part-time and UPS Freight employees in pension plans; creating 15,000 new full-time jobs at the company; strengthening subcontracting language; and organizing the company’s nonunion subsidiaries such as Supply Change Solutions and UPS SonicAir.
The possibility of a highly profitable UPS winning concessions from the union is worrisome. Givebacks at UPS could accelerate the recent trend of profitable employers, emboldened by concessionary deals at less profitable unionized employers, demanding similar concessions. The recent strike at the profitable motorcycle manufacturer Harley-Davidson (see page 2) is just one example of this trend.
Gains by the Teamsters, on the other hand, could have the opposite effect. Winning back lost retiree health care, organizing the company’s nonunion divisions, defending union pension plans, and holding the line on a number of workplace and economic issues could boost the sails of unions facing similar problems.