UPS, Teamsters Will Return to the Table
Prospects for halting the worst U.S. work stoppage this decade improved Wednesday when negotiators for United Parcel Service of America and the striking Teamsters union agreed to return to the bargaining table today.
The renewed talks were announced by the Federal Mediation and Conciliation Service, which said both sides agreed to meet with Chief U.S. Mediator John Calhoun Wells at the agency’s Washington headquarters.
But both sides downplayed expectations of a quick settlement.
“We have seen no sign that the company has changed its attitude, so we are not particularly optimistic about these new talks,” said Teamsters President Ron Carey.
“We’re not going to make any predictions about the meeting,” UPS spokesman Norm Black said. And other UPS executives said the company did not plan to renegotiate the “final” offer UPS made last week.
Today marks the fourth day of the nationwide strike against Atlanta-based UPS by the Teamsters, which represent 185,000 of UPS’ 302,000 U.S. drivers and other workers. Because UPS dominates the U.S. package-shipping industry--it has about 70% of the market--the walkout has caused tremendous economic turmoil by disrupting deliveries for not only corporate giants and small businesses, but also educational institutions, hospitals and consumers.
UPS, which has annual revenue of $22 billion, said management personnel are shipping 10% or less of normal daily volume.
Earlier Wednesday, President Clinton again ruled out any direct intervention by the White House, even though some major business groups pleaded with him to take action.
“The shipment of goods is our lifeblood,” said the National Retail Federation, saying that $50 billion of the nearly $2.5 trillion in annual retail sales comes from catalog and mail-order sales, which rely heavily on UPS and other shippers.
“The economy, which is enjoying unprecedented sustained growth, could experience a sudden downward spiral if the strike continues for an extended period,” said the group, which includes Sears, Roebuck & Co. and Federated Department Stores Inc.
U.S. Chamber of Commerce President Richard Lesher, in a letter to Clinton, said the strike could cause “irreparable harm” to small and medium-sized businesses, “necessitating massive layoffs.” Alternatives to UPS “are few or simply unavailable at this time,” Lesher said.
The dispute, which is mainly being fought over pension issues, full-time job opportunities and UPS’ use of outside contractors, continued to take a personal toll. Dozens of people have been arrested for picket line confrontations, including 11 on Wednesday in Somerville, Mass. One UPS truck was riddled with bullets in Hilliard, Ohio.
Wall Street also began taking sides. The stocks of UPS rivals Federal Express and Airborne Freight, which are experiencing a surge of business from the walkout, rose for the third straight day.
But firms hurt by the strike were punished. For instance, the stock of Sport-Haley tumbled 15% after the Denver-based sportswear maker warned that the strike could hurt its earnings in the current quarter.
UPS itself, in a filing with the Securities and Exchange Commission, confirmed that its earnings and sales will be hurt by the strike and that it could permanently lose some accounts.
But the company, which is privately owned by its managers and employees but still files financial statements with the government, said it could not predict a figure for the financial damage until the walkout ends.
For the U.S. Postal Service, the UPS strike is like “Christmas in August,” with the inflow of packages and parcels equal to that of a holiday season, said spokesman Mark Saunders.
August is normally slow, but the strike has produced increases of 70% in express mail, 50% in priority mail and 20% in regular parcel service--even though the Postal Service is restricting how many parcels can be shipped by each customer, Saunders said.
Even with the increased effort, the post office is not able to serve every type of UPS delivery. It will handle packages only up to 70 pounds, whereas UPS delivers up to 150 pounds.
Clinton told a news conference that he was concerned about the strike’s inconvenience but stressed that the walkout had not met the “high standard” of the Taft-Hartley Act. Under that law, the president can intervene if he believes a strike poses an imminent threat to national health and safety.
The walkout, the first nationwide strike in UPS’ 90-year history, has forced customers to get packages shipped via FedEx, Airborne, the Postal Service and other couriers.
But the competitors and experts alike say they can’t possibly handle all of UPS’ business, and they have put restrictions on customers and new business.
All of which has been an eye-opener for many firms that relied heavily on UPS.
“I have learned an important lesson: Don’t put all my packages in the back of one truck,” said Lynne Simmons of Marietta, Ga. She’s been unable to fulfill orders for her Native South company, which uses UPS to ship her Southern specialty foods.
The strike created a “mini-crisis” for Viva America Marketing Corp., a Costa Mesa unit of Westar Nutrition Inc. that on some days ships as many as 1,000 packages of nutritional supplements to distributors, said Marketing Director Jeff Powlowsky.
The company counted on UPS to handle 99% of its shipments. And because it had done only minimal business with other private shippers, it wasn’t possible to turn to them for help, Powlowsky said.
“For us to go in and demand that they now ship 1,000 packages in a day for us would not be a possibility,” Powlowsky said. So Viva America turned to the Postal Service.
In Des Moines, Briggs Corp. usually ships about 3,200 packages of medical supplies daily to more than 40,000 hospitals, nursing homes and other customers, but now it’s shipping a small fraction of that.
“The thing that’s really scary is, our customers serve the people who are the most elderly and sick and frail in the country,” manager William Hipwell said. UPS has said it would put medical packages at a higher priority.
Contributing to this report were Times staff writers James F. Peltz in Los Angeles, Robert Rosenblatt in Washington and E. Scott Reckard in Orange County. Times wire services were also used.
