UPS Strike Pushes Envelope on Both Sides
Sweltering in the midday heat on a Teamsters picket line in Houston, United Parcel Service driver Jesse Vega sounded as though his labor militancy was starting to wilt.
“I’m happy with my pay and my pension,” said Vega, 30, who earns about $50,000 a year--the average for UPS drivers. “Sometimes I wonder why I’m out here.”
As the Teamsters union strike against UPS entered its 11th day, both sides were showing increasing signs of strain even as each vowed to fight on. Both parties also agreed, however, to resume negotiations today in Washington at the request of Labor Secretary Alexis M. Herman.
The work stoppage has left UPS, by far the nation’s largest parcel-shipping company, a shell of its normal self. UPS typically moves 12 million packages a day; it’s currently moving only 10% of that using mostly nonunion managers.
Yet the Teamsters union, representing 185,000 domestic UPS employees, is increasingly hearing grumbling from its rank and file. While less than 5% of union members are said to be crossing picket lines, more Teamsters are publicly expressing worries or raising questions about the strike’s merits.
“I don’t know what will happen if the strike lasts for a very long time,” said Chuck Hong, another Teamster on the Houston picket line. “People have bills to pay.”
For its part, UPS remains in strong financial shape but is incurring about $300 million in losses a week and is increasingly facing the prospect of forever losing some customers whose lives and businesses have been turned upside down by the walkout. Its credit is still highly rated, but credit agencies have issued notices that they are watching the situation carefully.
“There is the risk of some permanent loss of business” as frustrated businesses shift their accounts to such rivals as Federal Express Corp. and the U.S. Postal Service even after the strike ends, said Martine Nowicki, a credit analyst at Moody’s Investors Service in New York.
But like most observers, Nowicki said the loss wouldn’t permanently cripple UPS even if the strike drags on, because its competition either is not geared to moving so many small parcels to every house on the block, or can absorb only a small part of UPS’ volume. UPS, with revenue of $22.4 billion last year, normally handles about 70% of the nation’s domestic package shipments.
Even some UPS competitors dismissed the notion of permanently grabbing a big chunk of UPS’ clients, though they didn’t deny using this surprise windfall to show customers why they should switch from UPS.
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“We’re well aware that a good deal of the business will go back to UPS” when the walkout is over, “but a portion will not go back,” said Rocco Sacci, a spokesman for Emery Worldwide, a Redwood City, Calif.-based unit of CNF Transportation Inc. that specializes in flying heavier freight between businesses.
“Most definitely we would like to have” some spillover customers from UPS, Sacci said. “That’s what business is all about.”
That the strike has lasted this long is a surprise to many. When the walkout began Aug. 4, the conventional wisdom among labor experts was that a protracted strike was unlikely.
UPS, despite being the most unionized company in the package-shipping industry, has never been known to take an especially hard line with organized labor. Now it is, and “this is going to be a much more bitter battle than one might have anticipated,” said Greg Tarpinian, a New York-based consultant to labor unions.
The company’s willingness to withstand a continuing strike “reflects a change in corporate culture at UPS,” he said. “UPS is no longer the paternalistic, we’re-in-this-boat-together company that it once was.”
At the same time, the Teamsters at UPS never were regarded as a particularly militant group, but now they’ve shown otherwise. “Most of these people have never been on a strike in their lives,” one union official said privately.
No more. “The vast majority [of striking UPS workers] are in full support” of the walkout despite the “small number” who are grumbling, said Teamsters spokesman Steve Trossman.
About 8,860 non-management workers have crossed the picket lines, UPS spokeswoman Jennifer Jiles said Tuesday. The union said those crossing appeared to be mainly nonunion workers from Southern “right-to-work” states where employees can’t be compelled to join unions even if they are represented by a union contract. UPS said they’re scattered nationwide.
Even so, “when you have 185,000 people on strike, that’s a very low number,” said Kate Bronfenbrenner, a labor specialist at Cornell University who has conducted research for the Teamsters.
The union members with the greatest stake in the dispute are full-timers such as Vega, who enjoy pay and benefits that most blue-collar workers can only dream about. Many would not be able to last long on the scant $55-a-week strike benefits they are receiving. (The union said Tuesday that it has been authorized to borrow millions of dollars from the AFL-CIO and some affiliated unions to help pay those benefits.)
Yet even though the supposed unfair treatment of part-timers and the creation of more full-time jobs have been key themes among union leaders, the part-timers themselves are split.
While many have invested years in the company in hopes of landing a full-time job, some others regard UPS as a temporary employer and thus might be tempted to accept the company’s last offer if it were somehow put to a vote.
“There’s always concern about that,” said Jeff Witherill, a 29-year UPS veteran and staunch Teamster backer who has been on the picket line at the company’s facility in Van Nuys.
One temptation for some part-timers, union members said, is a provision in the company’s last contract offer that would provide immediate profit-sharing bonuses of $1,530 for part-timers.
Another key item in the dispute is UPS’ bid to wrest its workers’ pension fund from Teamsters control, a move the Teamsters reject. (See Story, D1)
Meanwhile, small groups of workers staged protests in Salt Lake City and in Washington, Pa., near Pittsburgh, to urge the union to let them vote on the company’s last offer.
“From what I’ve seen, they’re offering us good benefits, good pay, and they’re offering to move people into full-time,” Marcy Munnell, 49, a part-timer with UPS for 20 years, said at the Washington site. “If what the company showed us is true, and they put it out for a vote, I think we’d take it in a heartbeat.”
Union officials have refused the company’s call for such a vote. They say that the overwhelming 95% approval of a strike authorization measure by Teamsters who cast ballots in mid-July--albeit before the company’s revised final offer was made--is evidence enough of where members stand.
Trossman said Tuesday that “our members have seen the offers side by side . . . and they’re voting with their feet and their solidarity.”
UPS hasn’t yet opted for the main weapon available to companies trying to break a strike: hiring replacement workers. Labor experts suggest various reasons: the extensive training required to bring newly hired workers up to company standards, the potential damage to the company’s image and the possibility that such a move would only stiffen the resolve of the strikers and organized labor in general.
However, UPS has leased about 40 aircraft and flight crews in recent days to help keep it running.
UPS’ Jiles said the strike will not only mean losing some customers forever, but will mean “a loss of consumer confidence in UPS” nationwide that UPS will have to rebuild.
“When this all blows over, most people that have used UPS will either stay with or go back to UPS,” said Gary Aster, an analyst in Seattle with the investment firm Dain Bosworth Inc. “Only a small percentage of UPS’ business will be lost forever.”
Silverstein and Peltz reported from Los Angeles and Hart from Houston. Times wire services also contributed to this story.
* FEELING THE PAIN
The strike is posing logistical nightmares for smaller companies in particular. D1
