Bloomberg News: UPS Freight Says Some Teamsters Are Using 'Deception'

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.

Overnite Legacy

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.

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