June 8, 2007: Thousands of Teamsters are working under the national freight agreement at wages that are at or below nonunion scale.
Most are not “trainees” but Teamsters with years of experience.
This problem can be corrected in the upcoming contract.
The NMFA has a starting wage of 75 percent of scale, which is now about $16.50 per hour. Over a two-year period, a Teamster will lose about $25,000 in wages before reaching union scale.
The tiered wage creates divisions among Teamsters. It gives companies an excuse to use more casuals, because they claim they are having trouble hiring people. It’s to time return our contract to union scale for all.
IBT Survey: Too Weak
In late May the Teamster Freight Division sent all local union officials a survey on the NMFA. The good news is that the survey recognized that the tiered wage is a problem.
The bad news: it didn’t even offer the option of eliminating the tiered wage. It offered three choices: shorten the progression, increase the start rate, or start experienced Teamsters at full scale.
That last option—retain the tiered wage except for experienced Teamsters—it might look inviting, but it could be a disaster. If you give an employer a choice of hiring an experienced Teamsters at $22 or someone from a nonunion carrier at $16.50, you may make it hard for Teamsters to gain work in freight.
The answer is clear: end the tiered wage.
June 8, 2007: UPS management has put a dangerous proposal on the table: to pull UPS Teamsters out of the Central States Pension Fund, the plan that covers 42,000 full-timers in 25 states.
Under the law, UPS would have to pay $4 billion in withdrawal liability to the Central States to break out of the fund—a penalty management is happy to pay because they can make it up over time by reducing future benefit costs.
Our union has always opposed pension grabs by UPS in the past because the company’s goal is to weaken our union and our benefits. In 1997 we defeated the company on the issue and won major benefit improvements.
But this time, the Hoffa administration may go along the company’s plan, calling it “a serious proposal that must be seriously evaluated.” The entire contents of the last Teamster UPSDate was dedicated to talking about management’s proposal—without a single word on what the union’s proposal is.
UPS’s pension grab would hurt our union in the long run—in exchange for not much benefit in the short run.
Under the company’s initial proposal, the UPS-only fund would pay a 25-and-out benefit of $2,500, a 30-and-out benefit of $3,000, and a 35-and-out benefit of $3,500. Benefits would be capped at a maximum of $3,500 a month no matter how many years you work.
At $100 per year of service, the proposed UPS pension would actually pay less than Central States, which pays $123 per year of service. And that number will go up at least eight percent a year, so Central States will pay about $175 per year by the end of the next contract. The main improvement is that the UPS-only plan would restore early retirement by eliminating the six percent per year penalty for retiring before 62.
Of course, UPS can sweeten the pot and improve their initial offer. We fully expect that to happen.
But UPS Teamsters shouldn’t have to be pulled out of Central States to get the benefits they deserve. It’s our union’s job to win full 25 and 30-and-out benefits at any age and affordable retiree healthcare in a Central States plan.
The reason is simple: breaking apart the Central States Fund will weaken our union and put members’ benefits at risk.
Long Term Problems
UPS’s proposal would establish a UPS Pension Plan, with management officials and Hoffa administration Teamster officials as trustees. A Teamster vested in the Central States Plan would in the future draw two separate checks, which would add together to make up a pension.
Central States would not give up funds that have been contributed over the years. They would stay there and provide a partial pension, while the UPS Plan would pay the rest of the pension. Healthcare and retiree healthcare would continue to be provided by Central States.
By breaking up and weakening the Central States Fund, management’s proposal would put UPS members’ future pensions at risk. UPS currently contributes $500 million per year to Central States. That income, which grows each year, would be gone forever.
If the big freight companies follow UPS’s example and pull out, the Central States Fund would be even worse off. The CEO of ABF now says busting out of the Teamster pension plans is his top bargaining goal.
UPS Teamsters would still depend on the fund for a large part of our pension. It would not be smart to weaken the fund by supporting a pullout when we will still need the fund to support our retirement.
Real Problem; Wrong Answer
UPS’s proposal for a UPS-Teamster plan covering the Central States has been tried elsewhere. Let’s look at the results.
Local 804 in New York is a UPS-Teamster plan just like the one being proposed for the Central States. Over the last ten years, that fund’s investments have performed worse than Central States. At the beginning of this year, UPS’s trustees forced through a 30 percent pension cut.
Now UPS is trying to push through a pension cut in New Jersey Local 177—another UPS-Teamster fund. That decision is before an arbitrator.
Both of these plans are based in Atlanta, at UPS headquarters, with all employer trustees being UPS management. They show that a UPS-Teamster pension plan would not be a magic bullet.
Early bargaining gives us leverage. We need to use it to win benefit improvements for UPS Teamsters in the Central States Fund and all Teamster pension plans, including:
Affordable retiree healthcare. Cuts in retiree healthcare are the number one obstacle to members retiring at 25-and-out 30-and-out—and the easiest benefit cut to restore. We need to substantially increase contributions to Teamster Health and Welfare funds so that our health benefits are protected and affordable retiree healthcare is immediately restored.
A timetable for improvements in all pension plans in writing at the time of ratification so that Teamsters in all funds will know that our pension benefits will be restored and increased as increased contributions build up in our funds. In 1997, UPS Teamsters got a document from Central States—before we voted on the contract—telling us in writing what our benefits would be if the contract was ratified.
Include UPS part-timers in all Teamster pension funds. Part-timers are already covered by Teamster plans in the West, New England and Upstate New York. As a result, part-timers in these areas receive superior pension benefits and the contributions for part-timers who do not vest are used to strengthen Teamster pensions, not to line the company’s pockets.
These are achievable goals. There’s no reason to give UPS an early deal unless it delivers the benefit improvements that Teamster members need today—and the stronger benefit funds that Teamster members will need tomorrow.
June 8, 2007: Where is the Freight Division of our union? While Ken Hall and Hoffa “seriously consider” allowing UPS to split apart the Central States Pension Plan, the Freight Division should be sounding the alarm.
Behind closed doors, maybe they are. But it’s time to come out of the closet and speak out to defend our pension plans and our Teamster unity. Teamster leaders are elected to be the members’ voice to Hoffa, not the other way around.
One week after Ken Hall put out a press release about UPS wanting to pull out of the Central States, freight Teamsters got a nearly identical message from Freight Director Tyson Johnson.
For years now, Tyson Johnson and our own local leaders have been telling us how detrimental it is for any company to pull out of our pension fund.
A one-time payment from UPS is fine for the short term, but what about 20 years down the road? Pulling 40 percent of the contribution base out would be disastrous. Tyson Johnson needs to stand up for all Teamsters and tell Hoffa and Hall there’s nothing to negotiate with UPS when it comes to destroying Teamster pensions and Teamster power.
Greg Smith is a clerk at Yellow in Cleveland Local 407.
“We believe there is an opportunity in this negotiating cycle to withdraw from some or all of these [Teamster pension plans] and provide benefits directly to our employees…”
“We view the multiemployer [Teamster pension] withdrawal opportunity to be the most significant thing facing us.”
Robert Davidson, CEO of ABF, May 8, 2007
There you have it. The CEO is telling you that ABF would love to bust our pension plans and take over employee pensions in the next round of negotiations.
We should push that off the table right from the start, and let the carriers know that we are bargaining to improve health care and pensions, not turn control over to the employers.
The best way to start would be setting a precedent in the UPS and UPS Freight negotiations: bring more brothers and sisters into our Teamster pension plans, and not split them up.
June 8, 2007: Freight Teamsters be warned: the Freight Division apparently isn’t considering fighting to restore retiree health coverage where it has been devastated. Nor is there a plan to win a timetable for pension improvements.
On May 30 a three-page Freight Survey was mailed to all local union officers.
It has three questions (out of 15) on pensions and health care. But none of them call for any choice other than “maintaining Teamster pension plans” or “maintaining Teamster health plans.”
Maintaining a health plan is not anywhere near what we need.
We need affordable retiree health coverage restored in this contract in the Central States Fund and in other areas where it has been cut—guaranteed, in writing.
It is practical, it is in winnable, and it is necessary to restore promises made to Teamsters, and to keep our union growing and organizing.
June 8, 2007: Thanks to a lawsuit by a Roadway Teamster, workers who are off drawing disability pay and using Family Medical Leave Act (FMLA) time should no longer be forced to use up their vacation time. An employee should now have the option to take the vacation pay, or save the accrued vacation time.
But Yellow Freight doesn’t recognize the decision by the Seventh Circuit U.S. Court of Appeals. They insist that they will continue to make Teamsters exhaust their vacation time. The IBT Freight Division issued a statement to the effect that they intend to enforce this improvement.
June 8, 2007: There is a glaring weakness in Teamster national contracts—UPS, freight, and carhaul—which should be corrected in this bargaining round. The contract lets employers require a Teamster off on family or medical leave to burn up their vacation time.As it stands at present, if an employee uses leave time because of a childbirth or to care for a sick parent, they cannot take any vacation that year.
The court case referenced above is only a partial solution. It says that a Teamster who is drawing disability pay from a health and welfare fund is protected from vacation exhaustion, but Teamsters on FMLA time who are not drawing disability pay are not protected. It’s time to fix this in all national contracts.
June 8, 2007: Teamster carhaulers have entered the one-year countdown to the next national contract. The time for rank and file carhaulers to establish our network to share information, strengthen unity and build power is now.
June 1 marked the start of the contract year, as well as the date that our national contract became two-tier for the first time in Teamster history. Teamsters at Allied now make 17.5 percent less than other carhaulers.
“It’s brutal,” a Detroit driver commented as he thought about what he will lose in the coming year.
Many carhaulers are angry at the Hoffa administration for allowing it to get to this point. That anger has to be turned into a positive force.
We do have power. This is still—despite the growth of nonunion companies—a heavily unionized field dependent on a small number of shippers, with a highly skilled Teamster workforce.
Our network can unite Teamsters into a force to protect our contract.
Even in the face of threats from the company, the union, and the bankruptcy court, Allied Teamsters voted No in most big carhaul locals, and 48 percent overall. With another week of outreach, that deal would have been rejected.
We face a big challenge in the coming contract because the IBT leadership signed a three-year freeze with Allied.
The answer to that problem is this: what was taken away can be won back.
If Allied returns to profitability, the IBT can demand to reopen the Allied contract, with the aim of reestablishing wage parity. And the national contract we are about to bargain can contain language to facilitate that.
The time to organize is now. Contact Teamsters for a Democratic Union at (313) 842-2600 or send a message.
June 8, 2007: UPS management has been trying to win control over our pensions for years. After Teamsters defeated UPS’s pension grab in 1997 and won major improvements in our benefits, it looked like management’s dreams were finished.
Then the 2002 “Best Contract Ever” and the pension cuts of 2003 breathed new life into management’s old ambitions to get control over our pensions.
UPS Teamsters are angry over the cuts and they’re looking for answers. Management is trying to play off our anger to revive their efforts to take over our pensions. The company wants to convince Central States Teamsters that they will look out for our pensions.
When it comes to big promises, actions speak louder than words. The fact is management hasn’t been looking out for our retirement; they’ve been leading the attack on our benefits. Just look at the UPS record:
- UPS management’s representative to the Central States Pension Fund voted to cut our pensions and opposed a motion by our union trustees to increase employer contributions.
- UPS management’s representative to the Western Conference of Teamsters Pension Fund voted for benefit cuts, even though that fund is 100 percent funded.
- There are two UPS-Teamster plans like the one being proposed for the Central States and management has pushed for pension cuts at both. UPS’s trustees forced through a 30 percent pension cut in New York Local 804, and they are trying to cut benefits in New Jersey Local 177, where the issue is deadlocked to an arbitrator.
- UPS management refused to pay millions of dollars owed to two pension funds, in Virginia and New York. In Virginia, management stopped making required pension contributions when members were on vacation.
- UPS has been the number one supporter of legislation that would make it easier to cut our benefits.
UPS’s record shows that the company can’t be trusted with our benefits. But many UPS Teamsters will say Hoffa can’t be trusted either. After all, Hoffa promised that the “Best Contract Ever” would protect our benefits.
True enough. But we’re not going to get even with Hoffa by jumping for a bad proposal from management. Remember, management’s plan to break up the Central States Fund will only go to a vote if Hoffa is backing it.
Hoffa and UPS sold us a bill of goods in 2002. The answer isn’t to fall for a bigger bill of goods now. UPS is under pressure from stockholders and shippers to reach an early agreement. This gives us leverage. Let’s use it.
UPS Teamsters should not ratify any early agreement unless we have it in writing that the contract will restore affordable retiree health coverage and gives us a written timetable for restoring our pensions.
We can win these improvements without letting UPS break apart the Central States fund and weaken our retirement security over the long run.
June 8, 2007: As negotiators for UPS and our union square off over the pension issue, members in the Eastern Region’s two largest UPS locals want to know whether early bargaining will deliver a real pension increase—or a freeze that keeps benefits at pre-pension cut levels.
New York Local 804 and New Jersey Local 177 were the first Teamster locals in the nation to win 25-and-out and 30- and-out pensions. UPS management controls all of the employer trustee positions at both of these funds—and has used its authority to push for pension cuts.
UPS trustees pushed through a 30 percent cut in the pension multiplier at Local 804 effective Jan. 1 this year—over the opposition of Local 804’s trustees to the fund. In Local 177, Teamster trustees have blocked UPS’s demands for pension cuts so far, but the issue is in arbitration.
Local 804 members circulated petitions calling on the union to let members know what needs to be won in bargaining in order to reverse the cuts and increase benefits. The International requested this information from all of the benefit funds that cover UPS Teamsters, including Local 804 and Local 177. But this information has never been shared with the members.
“It seems like the plan is to restore what we lost and sell it to us like we gained something,” said Jorge Diaz, a package car driver from Local 804. “But to me, that’s not gaining anything. That’s a pension freeze.”
“We’re not being told anything, In 1997, we knew what the company was proposing and what the union was fighting for. We won higher pensions. We shouldn’t settle for a freeze this time.”