The most important labor contract talks in freight transportation begin September 27 in Washington when UPS and the Teamsters union begin negotiations on a new contract.
The current five-year deal expires next July 31. But already the jockeying has begun. Teamsters union President James P. “Jim” Hoffa, in a speech to the National Press Club on September 13, outlined his priorities in trying to gain the best deal he can for 250,000 UPS Teamsters.
Calling UPS “a unique company,” Hoffa said winning better health care benefits and pensions and creating more full-time jobs would be as important as better wages. Currently, UPS Teamsters earn about $70,000 in wages, and another $35,000 or so in fringe benefits such as pensions and health care.
“It’s going to be more wages, more pensions, and we want to maintain health care benefits,” Hoffa said when asked what the top priorities were in the UPS talks.
The internal union strategy already has begun. The International Union will meet with local union officers this Friday to finalize the Teamsters bargaining proposals for negotiations with UPS and UPS Freight (formerly Overnite), the company’s heavy freight LTL union.
Approximately 13,000 Teamsters work at UPS Freight, which will negotiate separately but concurrently through its freight division.
These “two-person” meetings will be in Chicago on Friday. Every local union that represents UPS or UPS Freight employees has been invited. At those two-person meetings, the Teamsters’ National Negotiating Committees will present their bargaining proposals for approval.
In a speech at the National Press Club, Hoffa signaled that the Teamsters’ strategy would include pension increases, maintaining health benefits and more full-time jobs.
“We’ve got a pretty good idea where we want to go in this contract,” Hoffa said. “There’s going to be a lot of pressure to increase our pensions to make them better. Pensions will be a big issue in the negotiations.”
UPS is the biggest and most profitable transportation company in the world. Last year it earned $3.8 billion net income on $53.1 billion revenue, up from the $3.3 billion net income on $49.5 billion revenue in 2010.
In 2007, UPS made a one-time payment of $6.1 billion to pull out of the Teamsters Central States multiemployer plan. It paid that money because of the deteriorating financial position of the Central States plan, the Teamsters’ largest plan.
When those multiemployer plans were formed in the 1950s, Hoffa’s legendary father James R. Hoffa was a force within the Teamsters. Back then, Teamsters had more than 500,000 workers in the freight sector. Now, except for the 250,000 UPS Teamsters, there are barely 60,000 unionized workers in the LTL sector. Those multiemployer plans are struggling financially because so few active workers are supporting many more retirees.
Back in the Teamsters’ heyday, the younger Hoffa recalled, “There were four people working and one person retired. That was easy. Now we have one guy working and five guys retired. The math is harder to maintain.”
Converting some of the 125,000 part-time jobs at UPS (which start at a much lower salary scale and top out around $19 an hour, compared with $27 for a full-time UPS Teamster) also is a top priority, Hoffa said. UPS has promised to create 20,000 full-time jobs, but that has not always been the case, the union says.
“We’re always working to make sure we get more full time jobs,” Hoffa said. “There are a lot of part time jobs there, and we’re always trying to move that (full-time) number up.”
Those, in a nutshell, are the major issues in the Teamsters negotiations. Also diverting the union’s attention to an extent, the Teamsters freight division also must negotiate a separate contract with 7,500 workers at ABF Freight System, the nation’s seventh-largest LTL carrier which is struggling financially.