Labor Encouraged by UPS Pact, Vows to Boost Its Efforts
Emboldened by the Teamsters union’s declared major victory in its 15-day strike against United Parcel Service of America, jubilant leaders of the U.S. labor movement vowed Tuesday to step up worker-organizing drives, political campaigns and lobbying efforts.
Labor leaders said the Teamsters’ tentative settlement with UPS--granting pay boosts, increased pensions and a conditional pledge to upgrade many part-time employees to full-time status--would provide badly needed encouragement to disenchanted workers and union activists across the country. The result, they maintained, is that more workers will be receptive to the notion of joining unions and that unions themselves, many of which have lost influence and members for years, could be revitalized.
Other labor experts and business leaders, though, cautioned against reading too much into the outcome of the strike, the nation’s biggest walkout in nearly two decades. They said the Teamsters’ strength at UPS is unusual in the U.S. economy, and thus what happened at the nation’s No. 1 package shipment concern isn’t likely to be duplicated at other companies and in other industries.
As details of the agreement emerged on Tuesday, it was apparent that the Teamsters’ gains came with conditions. The union’s key goal of creating 10,000 new full-time jobs by consolidating part-time positions hinges on UPS expanding its business, said James P. Kelly, chief executive of UPS. He said at an Atlanta news conference that those 10,000 full-time jobs are guaranteed “only to the extent that our volume increases.”
Kelly conceded that his company made key concessions--particularly in allowing the Teamsters to retain control over workers’ pension plans--but said he was satisfied with the agreement overall.
What’s more, Kelly said, UPS will have to lay off as many as 15,000 of its 338,000 workers if the company--as expected in some quarters--regains only 95% of its former delivery volume of 12 million packages a day. UPS lost more than $600 million in revenue during the strike.
Teamsters President Ron Carey, however, dismissed the layoff concern as a “scare tactic” from previous negotiations and predicted that the 10,000 new full-time jobs will be realized.
If so, labor experts said, UPS could itself benefit from the tentative settlement over the long run. They noted that the company suffers from costly turnover among part-time workers.
New Approach Seen Beneficial for UPS
The new approach, under the tentative settlement, “is a profitable decision from the company’s standpoint; it helps lower their future recruiting and training costs,” said Lawrence Kahn, a labor specialist at Cornell University.
Kelly said the company has “achieved the contract that we think is well within the parameters of allowing us to be competitive . . . there were dozens of issues and there was compromise on both sides.”
President Clinton, who applied pressure through Labor Secretary Alexis M. Herman to settle the strike, also said that the new contract was not one-sided.
“I think it’s a victory for the proposition that you can have a profitable, highly competitive company with good, solid labor relations providing good jobs and good benefits for the employees,” said the president, who is vacationing on Martha’s Vineyard, Mass.
“It’s not an outright victory [for the union] if you mean it’s also a defeat for UPS,” Clinton added. “ . . . I think this company will go forward, will do real well and the workers will do well.”
Union leaders, however, were not bashful in labeling the settlement a clear-cut win for organized labor.
“It shows that we can win these situations and that workers are fed up and are willing to fight back,” said John J. Sweeney, president of the AFL-CIO, the parent of the nation’s major unions.
Pact Presented as Inspiration
In a telephone interview, Sweeney said the tentative settlement would provide a strong counterpoint to the 1981 federal air-traffic controllers strike, which was crushed by the Reagan administration and widely credited with inspiring many companies to take tough anti-union stands during the 1980s and 1990s.
A buoyant Carey predicted at a Washington news conference that “nonunion workers will be talking about how this victory has inspired them to fight for the future, just as UPS workers did.”
Meanwhile, Teamsters officials vowed that members would now help UPS restore its lost business and good relations with customers. Carey said the company needed to recover to provide the sought-after new full-time jobs.
But Teamsters officials said they had assurances that the pledged 10,000 new full-time jobs destined to be converted from part-time positions would be above whatever new full-time positions would come from ordinary business growth over coming years. They said the employees to be upgraded to full-time status would come from the ranks of loaders, sorters, ramp workers and van drivers--people who, when were hired in recent years, were almost exclusively as part time.
UPS workers and managers have their work cut out rebuilding the company’s badly tattered package delivery business. During the strike, delivery volume shrank to 10% of its normal level of 12 million packages a day.
Company officials ruled out using financial incentives to win back lost business, although rival carriers said they expect UPS to offer some price cuts to valued customers. Ken Alden, the company’s vice president for customer service, said executives would telephone and personally visit many of the firm’s more than 1 million customers in an attempt to win back their business.
But the success of the new contract may depend more on the future performance of the economy as much as cajoling disgruntled customers.
Teamsters Control Pension Funds
Under the terms of the 160-page contract, the Teamsters will retain control over worker pension funds. The union also prevailed on benefits and workplace rules, gaining a general wage increase of $3.10 per hour over five years for full-time workers and raises of $4.10 per hour for part-timers. Also secured were safety protection for workers who handle heavy packages and as much as a 50% boost in pension benefits for the typical UPS worker who retires after 30 years of service.
Along with agreeing to create 10,000 new full-time jobs by combining existing part-time positions, if business conditions allow, negotiators expressed hope that business growth in the long run would provide even more full-time employment.
Those comparatively generous contract provisions aren’t likely to be matched at many other unionized companies. UPS’s generally high pay for full-timers--drivers, with overtime included, already earn about $50,000 a year--is the result of the company for years being both heavily unionized and the dominant force in the package shipment industry.
With union membership down to 14.5% of the U.S. work force and many companies facing stiff international competition, organized labor carries far less clout in most other industries.
Yet in a larger sense, many labor experts predicted that the settlement--approved Tuesday by a panel of Teamster local leaders and now awaiting rank-and-file ratification--will provide labor with a desperately needed commodity: inspiration.
In recent years, “the biggest challenge facing organized labor was a feeling of pessimism over whether it could make a difference any longer. But here, in this strike, organized labor made a difference and an impact with its stand,” said Geoffrey Garin, president of Peter D. Hart Research, which has conducted polls on union issues for the AFL-CIO.
Thomas Kochan, an industrial relations expert at the Massachusetts Institute of Technology, added that the clout the Teamsters appeared to show in the strike and its willingness to address issues of relatively low-paid part-time workers “ought to reinvigorate the efforts of a lot of people who have worked very hard with limited returns so far to demonstrate that are some benefits and accomplishment to be seen down the road. It may reinforce the spark that a lot of new people have brought to the organizing process.”
Few Expect Big Increase in Strikes
Although the settlement could spur more unions to call strikes to try to win better contracts, few experts expect a major increase in walkouts. Strikes, they explain, often divide unions and take a toll on their public image. Pressure for increased wages for union workers, which could set a tone for the overall economy, is expected to come mainly through normal contract negotiations.
In fact, a union-organizing effort at the North Carolina-based textile company Fieldcrest Cannon Inc. was defeated in a representation election just last week. It was the fourth such campaign to fail at the company, but this time, observers on both sides said, many workers were persuaded to vote against the union by news of the UPS strike and how it meant that striking workers went without pay during the walkout. Strikers received $55 a week from the union.
In the long run, the strike won’t be regarded as a big victory for labor, said Peter Eide, who is in charge of labor relations issues for the U.S. Chamber of Commerce. The strike, he said, “caused a lot of hardship for a lot of people and a lot of companies.”
Shiver reported from Washington and Silverstein from Los Angeles. Times staff writers Nancy Rivera Brooks in Los Angeles and E. Scott Reckard in Orange County also contributed.
* DAMAGE REPAIR: UPS launches effort to regain business lost during strike. D1
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What It Means
The impact of the proposed UPS settlement:
Consumers / Small Business
* Full service may be restored starting today, with workers and company officials doing what they can to bring back lost business. D1
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Employees / Organized Labor
* UPS workers get attractive raises and the potential for more full-time jobs; unions get new enthusiasm for organizing efforts. A1
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UPS
* The company expects not to regain all of its pre-strike business immediately, and may launch aggressive marketing programs. D1
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White House
* Labor Secretary Alexis Herman gets high marks for bringing UPS and Teamsters together for a settlement; Clinton avoids prolonged strike’s negative impact on economy. A12
