A potentially crippling strike against United Parcel Service, certain to disrupt package shipments nationwide, began Sunday night as tens of thousands of workers walked out after talks between the company and its largest union broke down.
Three hours of last-minute negotiations between United Parcel Service and the International Brotherhood of Teamsters on Sunday night failed to head off the strike, which will hurt thousands of businesses ranging from mail-order companies to railroads.
There were no plans last night for the two sides to return to the bargaining table.
Although the economy could surely absorb the impact of a short strike, the ripple effects would quickly multiply if the work stoppage dragged on for more than a few days.
About 1.5 million companies rely on UPS's fleet of brown vans to deliver 12 million packages daily.
The union and the world's largest delivery service have been unable to agree on a new contract for 185,000 of UPS's 302,000 U.S. workers covering wages, job creation, use of contractors and health and safety issues.
UPS, which normally handles 70% of domestic packages, has not revealed its contingency plans but expects to operate during a strike, delivering packages as fast as possible.
For some competitors, such as the U.S. Postal Service and Federal Express Corp., the strike will be a windfall, as they pick up defecting customers. Other shipping companies have said they do not plan increases in capacity, concentrating on their core customers. Indeed, industry analysts say UPS's rivals could not pick up all of the slack even if they tried.
Businesses have been preparing for a strike since last week. For example, clothing retailer Lands End has been warning customers to expect delays because most of its goods are shipped via UPS.
UPS volume has dropped about 8% in recent days as the strike threat loomed, costing the company about $5 million a day in business lost and causing a furlough of several thousand workers.
Teamsters President Ron Carey said he walked out of the talks because they became a waste of time. "The company has failed to recognize the needs of our members," Carey said last night as he left the Federal Mediation and Conciliation Service in Washington, D.C., where the two sides had been bargaining. "We have exhausted every possible approach to try to resolve the problem."
Union representatives made new concessions in a proposal submitted to mediators on Saturday night. But UPS apparently rejected that offer. Instead, Dave Murray, UPS's chief negotiator, called on the Teamsters to submit the company's proposal to the full union for a vote.
The Teamsters' actions are "highly irresponsible," Murray said.
It is not clear when the two sides will resume negotiations.
White House presidential aide Bruce R. Lindsey had encouraged both sides to reach an agreement that would head off a major delivery disruption. But Carey--himself a former UPS truck driver--gave up on the federally mediated talks about 10:30 p.m. EDT.
The Teamsters planned a rolling start to the strike, with workers walking off the job when the clock struck 12:01 a.m. Monday in each time zone. UPS's 2,000 pilots, who are represented by the International Pilots Assn., have pledged to support the strike.
Atlanta-based UPS's customer base includes major retailers such as J.C. Penney Co. and thousands of smaller firms such as Boyds Wheels, a Stanton, Calif., concern that makes custom auto wheels.
UPS also handles final distribution for long-distance truck and railroad companies. The railroad industry relies on UPS to deliver as much as 10% of its containerized shipments.
"We certainly would like to see the two sides settle their differences as quickly as possible, and the federal mediation service remains available to them," said White House spokesman Barry Toiv. President Clinton is not planning to intervene directly as he did when a pilots union went on strike against American Airlines in February.
Although the two sides had some "good discussions," federal mediator John Calhoun Wells said, "we just didn't make it."
UPS delivery employees, including full- and part-time workers, have been without a contract since their previous four-year agreement expired Thursday night.
Part-time workers, who load and unload packages overnight, make up about 57% of UPS's work force and earn an average of slightly more than $11 an hour, according to the company. Full-time employees, who drive trucks and deliver packages, average $20 an hour.
The Teamsters believe UPS relies on so many part timers in order to save money at the expense of providing good jobs. But the company says staggered delivery schedules and limited sorting periods require people to work shorter shifts.
The union is also seeking hard assurances that as UPS grows it will add more workers to its payroll rather than rely on subcontractors. The company would like to use cheaper contract labor to move packages between UPS centers.
In what it called its "last, best and final offer," UPS proposed hourly pay increases between $1.50 and $3.00, plus a profit-sharing bonus scheme that would net $3,060 for full-time workers and $1,530 for part timers this year alone. Additional bonuses would be paid in 2000. The shipping company also said it would convert 1,000 part-time positions into full-time jobs and give preference to current UPS employees.
Union workers are also concerned about workplace safety. In a drive to boost competitiveness, UPS employees must now carry more, heavier packages and deliver them ever more quickly. Those factors have caused more on-the-job injuries, the union said.
The two sides are also haggling over retirement benefits. UPS wants to withdraw from the Teamsters' multi-employer pension and health funds, and has offered to create new pension and retiree health plans instead. The union said that proposal would give UPS too much control over pension funds and future benefits.
Times wire services contributed to this story.