Contract Negotiations Update
September 18, 2012: The International Union will meet with local union officers this Friday to finalize the Union's bargaining proposals for negotiations with UPS Freight and UPS.
Every local union that represents UPS or UPS Freight employees is invited to send representatives to the "two-person" meetings in Chicago this Friday. The National Negotiating Committees will present their bargaining proposals for approval.
In a speech at the National Press Club, General President Hoffa signaled that the Union's bargaining proposals would include pension increases, maintaining health benefits and more full-time jobs.
Hoffa's comments at the National Press Club, included:
- "It's going to be more wages, more pensions, and we want to maintain health care benefits."
- "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."
- "We're always working to make sure we get more full time jobs. There are a lot of part time jobs there, and we're always trying to move that (full-time) number up."
Hoffa's comments came in a Q&A section following a speech that focused on the presidential election. He was not asked about UPS Freight and did not comment on those negotiations.
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Teamsters warn UPS they will "hold their feet to fire" in contract talks
Every one of UPS' millions of shippers should be aware of the time line of the talks, and the potential economic impact the settlement will have on their shipping costs.
Already, the foreshadowing has begun—even though the current contract does not expire until 12:01 a.m. on Aug. 1, 2013. Formal talks are set to open on Sept. 27 in Washington, D.C. The exact site has yet to be determined. The plan is to address non-economic issues this year, setting the stage to negotiate economic issues in 2013.
Further complicating this year's talks at UPS' package division, its largest, will be the expiration of the contract covering an additional 15,000 Teamsters at UPS Freight, its long-haul heavy freight division. That contract will be negotiated by separate management and labor teams even though both contracts expire at the same time.
A UPS spokesman refused to discuss the company's goals or disclose any negotiation details in the press. The spokesman only said that its overarching philosophy was to negotiate a deal that rewards its workers for what they do while allowing the company to remain competitive in a very competitive industry. He added that UPS wants a contract that is good for its employees, customers, and shareholders.
Currently, fully experienced UPS full-time workers earn about $31 an hour ($75,000 annually) before overtime and fringes. Counting benefits, each of UPS' 125,000 or so full-time employees costs the company around $100,000 in wages, health care, and pension.
But a sticking point for the union is the welfare of an additional 125,000 part-time UPS employees who start as low as $8.50 an hour. After decades of employment, those part-timers can top out at $19 an hour, which is a sore point for the Teamsters. The union wants UPS to create as many as 30,000 full-time jobs a year and is expected to press that in the upcoming talks.
UPS is the Teamsters' largest employer, by far. The 250,000 Teamsters at UPS dwarfs the 60,000 or so Teamsters in its freight division, mostly at YRC Worldwide and ABF Freight System. That contract expires next March 31, and will be negotiated separately from the UPS deals. No question, UPS is healthy. Headed into contract negotiations, UPS recently announced that it made $1.12 billion after-tax profit for the second quarter on $13.35 billion in revenue. Shareholders made $1.15 per share, a 7.5 percent improvement over last year.
UPS is on track to earn more than last year's $5 billion net income. Operating profit for U.S. domestic package jumped more than 12 percent, package volume is up 3.5 percent, Next Day Air and Second Day Air are up 5 and 8.6 percent respectively and average revenue per package increased 0.6 percent. Not only is UPS delivering more packages, it is making more money on every package it delivers.
At UPS, its domestic package unit is responsible for 63 percent of the company's profits. Ken Paff, organizer for Teamsters for a Democratic Union, says he wants Teamsters negotiators to keep those numbers in mind as our union heads into contract negotiations this year.
"It comes down to the members," Paff told Logistics Mangement. "The members have to be willing to say no. They have to be willing to hold the company's feet to the fire. The international (national bargaining unit) will settle low because they are in bed with the company. There has to be a big enough stink by the members so there is a danger of a no vote."
In addition to wages and more full-time jobs, Paff said protecting and improving the pensions will be a major negotiating hurdle. About five years ago, UPS paid $6.1 billion to exit the financially troubled Central States plan.
Will UPS Respect Teamsters Who Serve Overseas?
July 27, 2012: When Robb Breck came back in June from a year serving in combat zones in Afghanistan, he really needed some time with his family. Instead UPS denied his vacation and ordered him back to work.
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Robb Breck on duty in Afghanistan |
John Youngermann, a UPS feeder steward in St. Louis Local 688 and a co-worker of Robb's, pointed out, "After serving our country for over a year, Robb saw his family for just two weeks."
The problem is the contract requires 1,250 hours worked to qualify for a vacation, with no allowance for Teamsters returning from military service.
That's wrong. Fortunately, contract negotiations give us a chance to fix it.
Robb Breck drafted a contract proposal to address the problem. It was personally delivered by Youngermann to Ken Hall on July 21 at the Teamster Joint Council 13 picnic. Hall accepted it favorably.
"UPS is not showing me the respect that I deserve," Breck said. "It's not going to cost the corporation much to credit time served overseas toward our vacation time." After all, the number of Teamsters who would be affected would be small. But the impact is enormous.
Breck pointed out how stressful it has been on his family to have him gone for a year in a combat zone on the other side of the planet.
Robb also served a tour of duty in Iraq in 2005-2006, and lost his vacation that year as well.
Federal law requires employers to grant members of the military that are called to duty their jobs back, with seniority. It's time to go beyond the legal minimum, in the UPS contract and in all labor contracts.
Youngermann called this a "must win" issue. He's right. Let's Make UPS Deliver more respect to the military families who serve our country.
UPS 2nd Quarter Profits: $1.1 Billion
July 24, 2012: Headed into contract negotiations, UPS continues to make big profits, especially in the package and freight divisions where Teamster members work.
Today UPS announced that it made $1.12 billion in profits after taxes for the 2nd Quarter on $13.35 billion in revenue. Not a bad haul for three months.
Shareholders made $1.15 per share, a 7.5 percent improvement over last year.
The company's mega profits weren' enough for Wall Street. Analysts don't like that UPS downgraded its numbers for the rest of the year over worries about the global economy.
As we move toward contract negotiations, management will use that report to warn that the economy is slowing down. But the bottom line is that profits are up and management still predicts to make more than last year’s $5 billion.
Some highlights from the quarterly report:
- Operating profit for U.S. domestic package jumped more than 12 percent.
- Package volume is up 3.5 percent. Next Day Air and Second Day Air are up 5 percent and 8.6 percent respectively.
- Average revenue per package increased 0.6 percent. Not only are we delivering more packages; the company is making more money on every package we deliver.
Ken Hall, who will be leading contract negotiations with UPS, said the company would hire more drivers as volume increased. Well, volume is up. And so is excessive overtime. It's time for UPS to create the full-time jobs we're owed—both driver and 22.3 positions.
Make UPS Deliver at Contract Time
U.S. domestic package business is responsible for 63 percent of the company's profits. Those profits are on the rise and will easily top $5 billion this year. Keep those numbers in mind as our union heads into contract negotiations this year.
There's no reason to give UPS the early settlement they want unless they agree to a strong contract.
You can help Make UPS Deliver the contract we deserve. Click here to find out how.
Click here for a detailed report on the company's earnings from Market Watch.
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UPS to Add 'Plastic' Trucks to Existing Delivery Fleet
UPS said it has completed testing of its "plastic trucks," a composite-bodied vehicle that's lighter and uses 40% less fuel than its current package cars, and will soon add 150 of the new vehicles to its delivery fleet.
This vehicle, named the CV-23, weighs about 900 pounds less than the company's standard P70 package car, which has a traditional aluminum body, UPS said. The CV-23 has less cargo capacity, however—630 cubic feet compared to 700 for the P70.
UPS said five pilot CV-23s demonstrated "high reliability" in year-long testing on five different delivery routes, including the rough back roads of the Lincoln, Neb., area, the heat of Tucson, Ariz., and winter conditions in Albany, N.Y.
"This was a super successful project," UPS engineer Dale Spencer said June 21 in a conference call announcing the results of the test, which ran April 2011 to April 2012. "It's been a great story for us to tell because of the influence it will have on our future as far as building vehicles."
"The tests showed that the CV-23 is certainly appropriate for all kinds of the heavy uses that we have for our vehicles," Lynette McInitre, sustainability communications manager at UPS, said on the call. "We are indeed buying 150 of these, and we are going to be continuing to look at ways we can incorporate them into other package car models that we're going to have in the future."
UPS said it expects to receive the CV-23 vehicles in the fourth quarter. Once added to the UPS fleet, the vehicles will operate on high-mileage routes, the company said.
The CV-23 was built by specialty vehicle manufacturer Utilimaster Corp., which calls the vehicle the "Reach." It features a 4-cylinder diesel engine made by Isuzu.
The 900-pound weight reduction is "a big contributor" to the fuel economy of the vehicle, said John Knudtson, a vice president of product development at Utilimaster which is a subsidiary of Spartan Motors Inc., Charlotte, Mich.
"That's almost 1,000 pounds on every one of those vehicles, and it's really wasted weight," he said. "It's weight they have to carry around every day on their route for the whole life of the vehicle."
The total weight of a CV-23 in use, about half-loaded, is in the 9,000-pound to 10,000-pound range, Knudtson said.
The composite-bodied vehicle also features new body aerodynamics and powertrain technology that contribute to its fuel economy gain, UPS said.
In addition to their lighter weight, the plastic body panels provide maintenance advantages.
The composite material resists corrosion, which is particularly important for UPS package cars because they typically have an operating life of about 20 years.
The body panels also were designed for easy replacement. If a panel is damaged, it's just a matter of snapping on a new one and "you're back in service," Knudtson said. "Your truck isn't even out of operation for a day."
Spencer and Knudtson also discussed the potential for broader applications of composite materials in trucking.
Knudtson said the commercial truck industry, "being as conservative as it is, with the need to make sure that we have proven technologies and proven materials," tends to be a follower of the automotive industry.
"Whatever the automotive industry does, medium-duty and heavy-duty trucks typically fall in line a certain amount of years later," Spencer later added. "Typically, trucking ends up eventually adopting the same technology if it was a winner in the automobile industry."
"I do know that even in the Class 8 trucks, your heavy over-the-road trucks, they're introducing as much composite into their vehicles as they can," Spencer said.
Tim Kraus, president and chief operating officer at the Heavy Duty Manufacturers Association, said light-duty and heavy-duty vehicle manufacturers alike are looking at "light weighting," but for heavy-duty trucks, weight reduction isn't necessarily a fuel-efficiency issue.
If a manufacturer can trim the weight of a tractor by 1,000 pounds, trucking companies would then add 1,000 pounds of extra freight in the trailer, Kraus said.
"As long as they allow them to weigh 80,000 pounds, they're going to weigh 80,000 pounds when they leave," he said.
For example, HDMA has some member companies that manufacture aluminum hubs that save weight, but "that weight goes in the trailer as additional freight," Kraus said.
For fuel efficiency, Class 8 truck makers are focusing more on the engine and aerodynamics, he said.
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