Parcel shipping/Air Cargo: UPS aircraft mechanics set date for strike vote
Jeff Berman, Group News Editor -- Logistics Management, 8/17/2009
LOUISVILLE, Ky.—Late last week, Teamsters Local Union 2727, the designated bargaining representative of the aircraft mechanics of UPS, said it is calling for a strike vote by its members, with the vote expected on September 14.
The Teamsters Local 2727 said it has been in negotiations with UPS for a new collective bargaining agreement over the last two-and-a-half years and remain at a standstill, with both parties at an impasse on the central issues.
At the crux of these issues, according to the Local 2727: are protecting jobs from being outsourced overseas, and protecting members’ health benefits against escalating costs, coupled with what they say is an attempt by UPS to make the Local 2727 “the first long-time UPS employee group to take on the burden of healthcare costs.”
Another issue cited by the Local 2727 is proposals it has made to “fairly increase wages in light of massive profits has made since bargaining started.
“UPS is proposing minimal pay increases that would actually reduce our members earning power,” said Local 2727 President Robert Combine in a statement. “The company’s proposal comes nowhere near to fairly reflecting the record profit years it had during the first two years of bargaining.”
Even though the Local 2727 claims UPS has had record profits during this period, its earnings per share have dropped from $1.05 in the third quarter of 2007 to $0.49 during the second quarter of this year, when it posted a 49 percent loss.
Even though a strike vote is imminent, an analyst noted that may not occur.
“We doubt the workers ultimately go on strike,” wrote Stifel Nicolaus analyst David Ross in a research note. “Given that October/November is the start of peak season for UPS, we think the company will likely reach an agreement to avoid a strike. While it is a difficult economy to be asking for wage and benefit increases, UPS is not in the best bargaining position, in our view, as an extremely profitable company with better margins than its closest competitor.”
And Jerry Hempstead, president of Orlando-based Hempstead Consulting, told LM that it is key that UPS employees’ labor status falls under the Railway Labor Act, which he said could force UPS employees back to work if they acted to strike.
“Under the RLA, the two sides would have a mediated agreement if it came to that point, which seems unlikely. The same thing happened in 2006, when the airline mechanics voted to strike, and UPS settled…before the RLA was involved."
Hempstead also pointed out that when it comes to outsourcing UPS needs the ability to outsource some maintenance work overseas to remain competitive, explaining how some airlines have their major engine work done in Israel at a significant savings compared to the same work being done domestically.
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