United Parcel Services (UPS) and the Teamsters union are set to resume negotiations this week on a new collective bargaining agreement before the end of the month when a potential strike that could rattle the U.S. economy looms.
The current contract between UPS and Teamsters, which covers about 340,000 UPS workers, is set to expire on July 31. In mid-June, 97% of UPS Teamsters in favor of authorizing a strike if negotiations fail to yield a satisfactory agreement between the two sides. If negotiations falter this week and a strike begins the following week, it would mark the largest strike against a single employer in U.S. history and would be the first UPS Teamsters walkout since 1997.
While a strike would take a toll on the economy at large, due to delayed shipments and deliveries for consumers and businesses alike across the country, making a deal will impact UPS’ finances. The company enjoyed a record profit of $13.1 billion in 2022 but forecasted a slower 2023, and its first-quarter profit was down over 21% in the first three months of this year compared to the same period a year ago.
Other large employers engaged in union negotiations have seen costs soar. Amid American Airlines’ ongoing negotiations with its pilots’ union, the company upped its offer for pay and benefits by $1 billion to a total of $9 billion over a four-year contract after American’s pilots balked at a previous offer following United Airlines’ announcement of a more attractive deal for its pilots’ union. American’s decision to match United’s contract offer shows the leverage unions can exert in negotiations, and a similar dynamic is playing out between UPS and the Teamsters.
UPS, TEAMSTERS TO RESUME TALKS AS STRIKE DEADLINE NEARS
A strike by the UPS Teamsters could be the most expensive strike in the U.S. in at least a century, according to the Anderson Economic Group, a Michigan-based think tank that specializes in the impact of labor strikes. The group’s analysis puts the economic losses from a 10-day strike at more than $7 billion, including at least $4 billion in UPS customer losses and lost wages of more than $1 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UPS | UNITED PARCEL SERVICE INC. | 187.30 | +0.36 | +0.19% |
In its most recent annual report, UPS said it delivered 6.2 billion packages around the world in 2022. That amounts to an average of 24.3 million deliveries daily, which the economy’s logistics system would struggle to cope with in the event of a strike.
UPS PILOTS UNION SAYS IT WILL HONOR TEAMSTERS PICKET LINE IF STRIKE HAPPENS
Negotiations between the two sides have been touch-and-go, with agreements being reached in a number of areas like heat safety. But there was recently a two-week pause in negotiations after the Teamsters walked away, and unresolved issues like compensation for part-time workers linger as the deadline looms.
Under the current contract, pay for part-timers starts at $15.50 an hour and includes a pension, health benefits and tuition reimbursement – although UPS has told FOX Business that it already raised its minimum wage to $16.20 an hour to comply with federal requirements for government contractors and said the average part-time pay is about $20 an hour.
UPS STRIKE COULD BE THE MOST EXPENSIVE IN 100 YEARS
UPS Teamsters have been practicing picketing around the country to gather support and demonstrate leverage in the negotiations. The Teamsters tweeted on Sunday, “Members in every state are keeping the pressure on UPS through extraordinary unity and visible, raucous solidarity. UPS must come back to the table and prove to 340,000 Teamsters that the company is finally prepared to respect and reward all members.”
“We look forward to meeting the Teamsters at the negotiating table next week to resolve the few remaining open issues,” UPS said in a statement Friday. “With the contract expiration less than two weeks away, we need to work quickly to finalize a fair deal that provides certainty for our customers, our employees and businesses across the country. We started these negotiations prepared to increase the already industry-leading pay and benefits we provide our full and part-time union employees and are committed to reaching an agreement that will do just that.”
UPS reported its Q1 2023 earnings in April which revealed that the company’s consolidated operating profit was $2.5 billion for the quarter, a decrease of 21.8% from a comparable period the year before. The company attributed that to a “deceleration in U.S. retail sales” which resulted in lower volume.
UPS will report its Q2 2023 earnings on August 9 – just over a week after the expiration of the Teamsters contract and the deadline for reaching a new agreement.
FOX Business’ Aislinn Murphy and Megan Henney contributed to this report.
Read the full article here
