July 10, 2007: Bloomberg News: By David Mildenberg -- United Parcel Service Inc., the biggest employer of Teamsters members, said some of the union's locals are using a "campaign of deception" in an attempt to organize the company's freight-hauling unit.
"Some locals across the country have been telling employees there will be a Master Teamster Agreement, accompanied by regional supplemental agreements for UPS Freight," Jack Holmes, the unit's senior vice president of operations, said in a June 28 letter to its employees. "This is also not true."
The union is seeking to extend its contract from one UPS Freight facility in Indianapolis, where 125 workers have accepted representation, to the 15,000-employee unit's other 200 sites. Atlanta-based UPS, the world's largest package-delivery company, already employs 238,000 Teamster-represented drivers, clerks and sorters and is in contract talks for those workers.
"UPS might be trying to play some hardball and doing some posturing here," said Victor Devinatz, a professor of management at Illinois State University in Normal, Illinois, who does research on labor relations and union organizing.
Ken Hall, the Washington-based union's chief negotiator with UPS, said in an e-mail that "our members are disgusted by these vicious anti-union attacks. Jack Holmes has obviously violated our agreement not to negotiate in the press. Unless UPS retracts the letter sent to their UPS Freight employees and disavows this tactic of negotiating through the press, we would be happy to respond in kind."
Close to the Vest
UPS and the Teamsters have guarded details since the talks began in September, which typically is the best approach, said Michael Belzer, an associate professor at Wayne State University in Detroit who studies trucking-industry labor relations. The current UPS-Teamster agreement runs through July 2008.
"My general maxim is that when the press starts writing about labor negotiations, something is wrong," Belzer said. "You get locked into positions that you may not want to be locked into."
UPS spokesman Norman Black confirmed the Holmes letter, posted yesterday on the Web site of Teamsters for a Democratic Union, a group often critical of the union's leadership.
"Though most Teamster locals across the country have acted responsibly during the past few months, a few have chosen to begin a campaign of deception in hopes of gaining your support," Holmes said in the letter.
UPS Freight includes the former Overnite Corp., a Richmond, Virginia-based trucking company that UPS bought for $1.3 billion in August 2005. During the previous decade, the union engaged in a largely unsuccessful effort to organize Overnite workers.
"Evidently when they purchased Overnite, UPS also purchased Overnite's union-busting legacy," said Hall, director of the Teamsters' parcel and small package division. The unit had 2006 sales of $1.83 billion, or 3.8 percent of UPS's $47.5 billion total.
Wages and benefits accounted for 60 percent of UPS operating expenses in the first quarter, compared with 43 percent at FedEx Corp., the second-largest U.S. package-delivery company.
Teamsters President James Hoffa is being pressured by members who want a tougher stance against UPS, which earned a record $4.2 billion last year. Hoffa said yesterday that he was optimistic about reaching an early agreement with the company on a new contract. He declined to give details of the negotiations.
"While the Teamsters are playing patty-cake, UPS is kicking the union in the butt,'' said Ken Paff, the national organizer for Teamsters for a Democratic Union. "UPS will provide high wages to their full-time workers, but they also want 100 percent domination of work rules."
UPS shares fell 36 cents to $74.04 at 4:28 p.m. in New York Stock Exchange composite trading. They have declined 9 percent in the past year.
July 18, 2007: The International Union has requested all freight Local Unions to hold Contract Proposal Meetings by August 3, and to submit proposals to be received in Washington by August 13.
We encourage all freight members and stewards to take the time to submit proposals. A copy of the form to use is attached. (There is one form for the master (Articles 1-39) and one for the supplement). You can make copies to submit one proposal on each, and to get fellow Teamsters to do the same.
These proposals may be turned in to your local union by August 3 or mailed directly to the IBT.
The International Union has given very little time for this process, in the middle of the vacation season. Despite that situation, we urge members to use this opportunity to get involved now.
The forms are attached. Indicate the Article you want to change, or write “NEW” if proposed new article.
If sending directly to the IBT, send to Jim Kimball – Economics and Contracts Dept, Teamsters Union, 25 Louisiana Ave N.W., Washington, D.C. 20001.
What Are Your Proposals for the NMFA?
The TDU Freight Network is gathering proposal ideas so that we can choose a targeted number of key issues to rally around.
We won’t win everything. But united, the rank-and-file can make an impact on next year’s NMFA bargaining by holding our negotiators’ feet to the fire on our key demands.
July 12, 2007: Master contracts are the foundation of our union’s power. Will Hoffa let that foundation crumble? And what can concerned Teamsters do about it?
Master contracts cover about 25 percent of Teamsters, but they set standards for the majority. They are the foundation of Teamster power.
Jimmy Hoffa Sr. understood this principle and built up our national contracts. Is Hoffa Jr. giving up on the master contracts that were his father’s greatest legacy?
Just look at the warning signs that are flashing at us right now.
UPS. The Hoffa administration claimed early bargaining would deliver stronger pension and health benefits. But top officials are leaking that Hoffa may go along with UPS’s proposal to break up the Central States Pension Fund.
CARHAUL. The Hoffa administration has allowed 3,300 carhaulers, nearly 40 percent of Teamsters covered by the contract, to have their wages slashed to 17.5 percent below union scale—and frozen for years. This has happened even as billionaire Ron Burkle has taken over 60 percent of the industry.
FREIGHT. Freight division leaders openly question whether Hoffa has given up on this core industry. ABF’s CEO is promoting a scheme to bust out of Teamster pension plans and set up a company pension, or even just a 401(k).
DHL. IBT insiders report that Hoffa will allow DHL out of the National Master Freight Agreement.
UPS FREIGHT. Over a year ago Hoffa claimed a national cardcheck agreement would soon unionize 15,000 UPS Freight employees. Now management is playing hardball and attacking our union—and union officials in freight are concerned that Hoffa will give up Teamster standards to get the company under a contract.
UPS CARTAGE. Hoffa’s so-called “master” contract leaves substandard wages in place and no protection against subcontracting.
Master Contracts:Fact From Fiction
A true master contract uses our union’s national power to raise all Teamsters up to the highest level.
What the Hoffa administration calls a “master contract” is any contract that covers multiple locations, even if there’s no Teamster pension, the wages vary by location, and the conditions are inferior to our national standards.
Hoffa’s “master contracts” mean drastically lower wages (carhaul, UPS Cartage), undercutting our national standards (DHL and UPS Freight), and potentially even busting up our pension plans (UPS, freight, and UPS Freight).
Rank and File Can Make a Difference
Our Right to Vote on contracts gives members the power to prevent Hoffa from selling out our national contracts. But rank-and-file Teamsters need to be informed and united to use the power in our hands.
In carhaul, members nearly voted down Hoffa’s massive givebacks, but we fell just 2 percent short. With just a little more rank-and-file involvement, a 17.5 percent wage cut could have been prevented.
Do you want to be part of a movement to defend our contracts and rebuild our union’s power? Or do you want to sit on the sidelines?
Contact Teamsters for a Democratic Union today to find out how rank-and-file Teamsters can stand up for our contracts and the future of our union.
Click the links below to read more:
July 12, 2007: Will the Hoffa administration let DHL undermine our standards under the guise of a new 'master' contract?
The Hoffa administration and some local officials are floating a trial balloon to see if DHL Teamsters can be swayed into a company-plan to take them out of the National Master Freight Agreement. The sales pitch is that members will instead be in a DHL “master” contract.
They don’t mention that the company has pushed for this for years. Management knows breaking the master contract is the first step toward low-wage part-timers and lots more concessions in the future.
This is a serious threat. Teamsters should say No loud and clear to head it off now, before a deal is cut.
Most DHL Teamsters are in the NMFA or contracts that are just as good (Chicago is better). Some are under inferior white paper contracts. And of course DHL uses nonunion contractors to run their local operation at many stations.
The key is to bring all up to NMFA standards. We are not powerless here. The big strategic centers are Teamsters, under the NMFA. The pilots are Teamsters. We should put Teamster power to work to organize.
The alternative is to give the company what they want, in exchange for getting more dues-paying Teamsters.
July 12, 2007: In June ABF CEO Bob Davidson circulated a letter to all Teamster employees saying that members should dump their Teamster pensions for a company 401(k).
The letter is supposed to be a sales job for the company’s effort to break out of our Teamster pension plans. Instead, it reveals that it would be a disaster for our union to let employers like ABF and UPS to take this course.
An 18-year Teamster wrote Davidson about the company’s proposal. And the CEO’s advice is telling. Don’t worry about losing your pension, Davidson says. Under ABF’s proposal, you would still get your 18-year pension from the Teamster fund—plus start building a 401(k) on top of that pension. It’s “not like Social Security,” Davidson writes, but your very own account.
What Davidson failed to mention is that with 18 years in a pension fund you don’t qualify for anything but a vested pension, which in most Teamster plans amounts to very little.
ABF’s pitch boils down to this: put your future in the hands of the company’s 401(k) and pray that the stock market goes way up. It might work. Then again, the lottery might work, too. You just have to pick that lucky number.
UPS Pullout Could Cause Fund’s Collapse
At least ABF management is up front about their goal: saving the company money on retirement costs. And Davidson is honest enough also to admit what would happen to Teamster pension funds if UPS and ABF pull out.
“A UPS withdrawal, or other adverse factors, would make them even less stable or cause their complete collapse,” Davidson wrote.
Our union needs to say one short word to these corporate schemes: No. The American people have said No to privatizing social security, and we need to tell UPS and ABF the same now, in a strong and unified voice.
The corporate answer is to destroy our Teamster funds to save management money on retirement costs. The union answer is to protect our retirement security by sticking together, strengthening our union funds, and winning benefit improvements.
UPS-Only Plans Cut Benefits
UPS management is pushing their own pension scheme which starts with busting 42,000 UPS Teamsters out of the Central States Fund. Management wants to establish a new UPS-only fund, with half corporate directors and half Teamster officials on the board.
UPS Teamsters don’t have to guess how a UPS-only plan would work. Two large funds exactly like this already exist. They cover all the full-time UPS Teamsters in New Jersey and the New York City areas. Both funds are housed right inside UPS headquarters in Atlanta.
UPS has a track record at these funds—and it should raise alarm for Teamsters concerned about our retirement security.
Management recently demanded big pension cuts in both. They got their way in New York, and slashed pension accrual rates by 30 percent. In New Jersey the union blocked the cuts, so management has pushed the issue before an arbitrator.
The New Jersey fund is only 52 percent funded, by the way. That’s less than Central States. The return on investment in the New York fund was just 3 percent over the past five years and just over 6 percent for the last ten years. That’s much worse than Central States.
These are UPS-Teamster plans just like the company wants to set up for 42,000 Teamsters in the Central States. And they are cutting benefits. This puts the lie to the company’s claim that you would be better off in a UPS-only plan.
Promises are cheap. The results speak for themselves.
The Positive Alternative
Hoffa’s “Best Contract Ever” and the post 9-11 stock market dip delivered pension cuts. But the recent bull stock market has boosted our pension plans and positioned us to win realistic benefit improvements. That should be the priority for this bargaining round at UPS and in freight.
Affordable retiree healthcare. We have an additional 70 cents per hour in benefits due on August 1 in our national contracts. Early bargaining at UPS can let us get a lot more, enough to pay for retiree health care at affordable cost.
A written timetable for improvements in all pension plans. We need a guarantee, in writing, so all Teamsters will know that our pensions will be restored and improved as increased contributions build up in the funds. In 1997, UPS Teamsters got a binding document from Central States before we voted on the contract. We should settle for no less.
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. This will improve pensions for both part-timers and full-timers and be a big boost to the Central States and other funds, bringing in thousands of new participants.
These are realistic goals. There is no reason to give UPS an early deal without them.
July 12, 2007: IBT Election Supervisor Richard Mark has very likely made his final decision of the 2006 IBT Campaign, and done so in a confusing manner.
Mark upheld the firing of Dan Virtue and Carlos Ramos by Hoffa, for the “crime” of Virtue running for Eastern International Vice President. Mark reasoned that since the action was taken after the election was over and certified, Hoffa could fire any political opponents and hire any cronies.
If that’s the case, we wonder why it took six months to issue the decision, which has been appealed by Virtue and Ramos.
In January, Virtue was removed as Eastern Region Freight Coordinator and Carlos Ramos, a Virtue supporter, was removed as an International Rep.
The seven-page decision makes clear that the Hoffa administration, in particular his Executive Assistant Leo Deaner, made up one lie after another to justify their actions. The investigation revealed that Hoffa’s stated reasons for firing Virtue were false.
Freight Director Tyson Johnson and former Director Phil Young testified that that Virtue did an “excellent” job.
The pretenses for firing Virtue included blaming him for Hoffa’s disastrous Red Star strike. Organizing Director Jeff Farmer contradicted that story to investigators.
The Election Supervisor indicates that if the firing had been during the election, his decision would have been very different.
So a thorough investigation showed that Hoffa fires respected leaders who are doing an excellent job for the “crime” of running for office or working to maintain national standards in freight. It may be legal. But it’s not good unionism or good leadership.
July 9, 2007: By Randolph Heaster:The Teamsters union has begun contract talks with UPS that could affect the direction of future negotiations with YRC Worldwide Inc. and other unionized trucking companies.
Although the current contract with the parcel giant does not expire until the end of July 2008, bargaining has already begun in hopes of obtaining a new agreement early.
One issue that UPS has put on the table is pension benefits for the company’s 238,000 union workers. According to recent trade industry reports, UPS is seeking to exit the plan with a lump-sum payment of nearly $4 billion. The company proposes to then form a joint Teamsters-UPS pension plan for future workers.
June 28, 2007: Former Consolidated Freightways Teamsters are receiving checks this week in partial payment of moneys owed to them for the past five years. CF Teamsters who do not receive checks soon should contact their local union.
The first check received covered most of the WARN Act settlement of $2150 for the abrupt closure, in the "Labor Day Massacre" of 2002, when over 10,000 Teamsters lost their jobs. The second check should cover a percentage of money owed for vacation, sick pay, holidays, etc.
Teamsters have until July 23 to object if they feel they were shorted in calculating their vacation or other pay owed.
June 26, 2007: Logistics Management says there is good news for shippers in our union's current round of bargaining with UPS, and in the upcoming NMFA negotiations. "There is scant chance of a national strike as happened 10 years ago when Teamsters walked out against UPS and when they struck the LTL sector in 1994."
The article notes that Ken Hall is "seriously considering" UPS management's proposal to split up the Central States Pension. "That’s a far cry from the union’s stance in 1997 when UPS offered basically the same deal, and it resulted in a 15-day national work stoppage. But that was when Ron Carey was running the 1.3 million-member Teamsters now run by James P. Hoffa. The union has never had a national strike in transportation under the younger Hoffa."
June 18, 2007: By John Gallagher, for Traffic World - Pension benefits are in play as never before in the current round of negotiations between UPS and the International Brotherhood of Teamsters, and the future of LTL giants YRC Worldwide and Arkansas Best - as well as UPS's own freight division - may hang in the balance.
When the $48 billion parcel giant inked its last deal for 230,000 union drivers in 2002, it had hoped to be able to celebrate its 100th anniversary this year without the diversion of contract negotiations.
But now both sides are hoping to lock in a new contract as early as the end of the summer, according to industry sources, and avoid anything close to the 14-day strike in 1997 that threw a massive wrench into the trucking market as shippers scrambled to find capacity and rival carriers were deluged with diverted freight.
UPS is adamant that the parcel contract, which expires July 31, 2008, is being negotiated at the same time but separate from a new contract being created for UPS Freight covering 125 employees in Indianapolis, a terminal where workers voted to organize. However, some believe one UPS unit is being used as leverage against the other.
"There's going to be some sort of a trade-off involved with UPS Freight, absolutely," said Jason Seidl, an analyst with Credit Suisse. "Exactly what form that may take, who knows. But I think it's a chip that UPS management can use to help negotiate part of the (parcel) contract, whether it's related to working conditions, salary, or the pension fund."
The early start to negotiations this year has reduced the risk of a work stoppage, but hasn't kept rival carriers and their customers from drawing up contingency plans. UPS moves 15.6 million packages through its system each day, with 13.8 million flowing over the roads, on the rails and through the air of its domestic shipping network.
"(During the strike) in 1997, we got a huge surge of freight - but then again a lot of carriers did," said Con-way spokesman Gary Frantz. "Back then, people were unsure whether UPS could handle the strike. We''re more confident this time around."
While both sides took credit for a "win" in 2002, the labor landscape may have changed enough over the last five years to put UPS management more firmly in the driver''s seat in 2007.
"If you look at other unionized companies like the airlines and the auto industry, they've either downsized, gone through layoffs or renegotiated their contracts over the last five years," said Satish Jindel, a principal with SJ Consulting Group.
"Wages in the airline industry are easily 20 percent lower. While it''s desirable for unions to have decent wages for decent work, they have to recognize that a lot of people are working for less. So for them to push the cost structure of UPS higher, it could undermine the goal of protecting or growing their jobs."
Jindel also noted that besides rival FedEx - the largest express carrier shippers could turn to in 2002 in the event of a snag in negotiations - there was Airborne Express. "Now there''s DHL, and Airborne didn't have the global network that DHL has, or the access to capital that DHL has," he said. "As a result, if there''s a delay in contract execution, and shippers start to move business away, the company will be at risk of seeing that business go away permanently."
The basic matters of wages and work rules are taking a back seat so far to the longer term issues surrounding pension funds in the current round of negotiations, which kicked off in Detroit last September.
Agreeing to place multiemployer pension funds on the negotiating table is evidence, say some industry observers, that Teamsters President James P. Hoffa acknowledges his union may not be playing with as strong a hand as in previous years.
The largest of the Teamster multiemployer pensions, the Central States Southeast and Southwest Areas Pension Fund (commonly called Central States), was only 49 percent funded at the end of 2005, with roughly $21 billion in assets as of the first quarter 2007.
Because an estimated 60 cents of every dollar that UPS contributes to the pension fund cover the retirement benefits of non-UPS employees, the company has proposed - according to the Teamsters - paying a lump sum withdrawal liability owed to the Central States pension fund, an amount subject to negotiation between UPS and the pension plan.
Retirement benefits would thereafter be administered by a new joint Teamsters-company pension plan with an equal number of Teamster-appointed and UPS-appointed trustees.
"I can assure you that the negotiating committee will not consider any plan that jeopardizes the benefits of members in Central States or members of any other Teamster fund," said Ken Hall, director of the Teamsters Parcel and Small Package Division and co-chairman of the UPS national negotiating committee.
"The company's proposal is not a negotiating tactic. It is a serious proposal that must be seriously evaluated and compared with the other options available for improving and protecting the pension benefits of our members."
But not all Teamsters agree that management is holding the best cards. Teamsters for a Democratic Union, a grassroots group based in Detroit, believes the Teamsters are still reaping the fruits of a "very successful strike" in 1997. "That still gives us added bargaining power as a union," said TDU national organizer Ken Paff. "We're saying to the union leadership, use some of that power to drive the company demands off the table and put the union demands on the table."
According to TDU, some of those demands should include adding 15,000 new full-time jobs, wage increases and better health care benefits.
"The union could tell the company that if they want early ratification, they have to withdraw the pension proposal, or we'll see you next year," Paff said. "If they were to do that, the TDU as well as the rest of the UPS Teamsters would rally behind them."
Some speculate that one way UPS Freight could be used as a bargaining chip in the current negotiations would be to agree to a card check at all 300 service centers in UPS Freight''s network - in exchange for agreeing to get out from under the multiemployer pension fund. It has been estimated that it would still cost UPS anywhere from $4 billion to $10 billion to payoff its pension obligations under the fund.
"UPS is pretty smart, and if they look at the numbers and it made sense, they'd jump at it," said Art Hatfield of investment firm Morgan Keegan. "It might not be a good deal for the Teamsters, but it would be great for UPS. They've got a lot of cash, and even if it was an $8 billion or $10 billion hit and they had to raise debt to pay it, they''d be swapping out an uncertain liability for a certain one. That would be a positive change to the balance sheet."
Meanwhile, YRC and Arkansas Best, which will be renegotiating the National Master Freight Agreement with the Teamsters later this year, are keeping close tabs on UPS and whether it is successful in negotiating its way out of the pension fund.
"We'll be bargaining with the same group, and UPS is participating in all the same pension funds we are, so it will certainly be of interest to us," said Mike Smid, president and CEO of YRC National Transportation.
According to Securities and Exchange Commission documents, YRC contributed $542 million to the pension plans last year, up from $472.7 million in 2005 and $378 million in 2004. The company estimated its full withdrawal liability to be $3 billion to $4 billion, payable over 20 years.
"Yellow Transportation, Roadway and the applicable subsidiaries of Regional Transportation have no current intention of taking any action that would subject us to withdrawal obligations," the company said in an SEC document filed earlier this year.
However, at a conference hosted by Bear Stearns May 8, YRC Chairman, President and CEO Bill Zollars said he considers the multiemployer pension plan "an investment like any other investment," and negotiating a deal to exit the plan "all depends on how much we put in and what we get back for it."
At the same conference, Arkansas Best President and CEO Robert Davidson was more explicit.
"We can provide the same benefits that we're providing now directly to our employees at significantly less cost than we're now paying. That money would allow us to amortize the withdrawal liability that we would pay to the funds, and would lower our operating ratio to allow us to be even more competitive in the marketplace."
ABF estimates it would cost the company $600 million to $650 million to withdraw from the plan, payable over a 10- to 15-year period.
"We have the capital structure to allow us to do it, so the plan is to pursue that aggressively, and hope Yellow and Roadway are on board with us for it," Davidson said.
Whether or not UPS Freight is used as a bargaining chip in the negotiations, Wall Street believes UPS Freight will eventually be organized.
"We continue to believe that the model contract worked out with Indianapolis will not include restrictive work rules like the National Master Freight Agreement, allowing them to operate as they always did as a nonunion carrier," said Stifel Nicolaus analyst John Larkin.
"Wages and benefits should go up, as the carrier is unionized, but UPS, as the largest employer of Teamsters in the world, will more than offset any labor cost disadvantage with added density and improved efficiency."