December 5, 2007: The removal of 44,000 UPS full-time Teamsters from Central States opens the door to lower pensions for all Teamsters down the road—not just in the Central States.
UPS is set to save billions of dollars with the deal.
Whatever your pension plan, members need to understand why UPS wanted this deal and what it means for you.
Lowest Pension in the U.S.
The new UPS plan that replaces Central States will pay members a lower pension than every other Teamster plan for UPSers—with current benefits of $3,000 a month for 30 and out.
That means nearly half of UPS’s full-time workforce will be getting a substandard pension.
Teamsters in the West, in Chicago Local 705, in Local 710 (Illinois and Indiana), in New England, Washington, D.C., New York, New Jersey, Baltimore, Virginia and every other plan all get a better pension.
That alone tells you why management is so happy with the new contract.
But UPS got more than low pension benefits out of this deal. They also got a tool for capping pensions in other plans in the future.
No Set Contributions
The new UPS pension fund will save UPS billions on future pension contributions because the contract no longer requires the company to make specific hourly payments to this pension fund.
This is unlike every other pension plan for UPS Teamsters.
In every other pension fund, UPS will pay pension contributions of more than $10 per hour by the end of the contract. That’s $21,000 each year per employee into every other Teamster pension plan.
In the new UPS pension plan, UPS has no such obligation. Instead of making UPS pay an hourly contribution, the new contract only says that UPS must fund its plan as required by law, no more.
The law only requires that the company keep enough money in the fund to pay for the current benefit level. This means, over time, the company will pay far less for pensions in the new plan covering the Central and South—the lower the benefit, the greater the savings to the corporation.
Dragging Down Pensions
By the next contract in 2013, the benefit level in the new UPS plan will be the lowest in the country and have been frozen for 16 years—and the pressure will be on to raise pensions in the Central and South.
UPS may offer Central and Southern members a higher pension while putting the squeeze on every other fund. The new contract gives them a tool to do just that. Article 34 of the master agreements defines exactly what the benefit level is in the new UPS pension plan. Because that benefit level is not tied to any hourly contribution, UPS would be able to offer to raise the pension in the Central and South without increasing its hourly contributions in other areas by a dime.
In the new contract, UPS increased its pension contributions by $3.25 an hour. Expect them to offer less next time.
Without higher hourly pension contributions, Teamsters in every other pension fund cannot protect and increase their benefits.
Defending Our Pensions
UPS is already thinking about the next bargaining round and how they can control benefit costs by keeping a lid on hourly pension contributions.
We cannot allow that to happen.
Lower pension contributions would not just affect UPS Teamsters.
UPS sets the pattern for the benefits of hundreds of thousands of other Teamsters. It is highly likely that the freight contract covering 80,000 Teamsters will mirror the pension contribution just negotiated at UPS.
Our entire union suffered a loss when the International caved in to UPS’s pension grab in the Central States.
We now need to adjust to the new situation, and make sure the problem does not spread to other funds, or undermine our good Teamster pension benefits.
December 5, 2007: Against the advice of the International, UPS Teamsters in Pennsylvania voted to reject the national contract and the Central Pennsylvania and Western Pennsylvania supplements.
Their No Vote got UPS to put better offers on the table—which are being put to a vote now.
The improvements in the new offer are limited—and many members feel more could have been won.
After the contract, UPS and the International Union put on a full court press to settle the rejected supplements by Jan. 1. Within one week of the contract rejections, new ballots were in the mail to UPS Teamsters in Central and Western Pennsylvania.
“After we voted our supplement down, no meeting was ever held to ask members what we want. When we submitted proposals for changes, they were not even submitted to the negotiators,” said Jeff Fretz, a package car shop steward in Allentown Local 773.
“Our supplement is substandard and we were denied any voice in improving it. That’s what bugs me the most,” Fretz said.
Under the new offer in Central Pennsylvania: no part-timer will take a pay cut when they work as a cover driver; members will earn a third week of vacation after nine years instead of ten; and part-time start times must be posted weekly—among other minor improvements.
Teamsters in Western Pennsylvania won small changes that are designed to reduce the frequency of package car drivers involuntarily covering areas outside of their bid area—including language to expedite grievance hearings on this issue and the creation of fifteen new full-time package driver jobs.
Hoffa and Hall told UPS Teamsters that they had made the company put its best offer on the table ten months before our contract even expires.
But 15,000 UPS Teamsters in three supplemental areas proved them wrong. By demonstrating more backbone than our International Union leaders, they have all won improvements in just a couple weeks.
Think of what more could have been won if our union had been standing up for improvements instead of selling the company’s givebacks.
December 5, 2007: The national UPS contract may soon be settled if the rejected supplements gain approval after being improved. But nearly 20,000 UPSers work under local contracts that are independent of the national agreement—and far from settled.
UPS Teamsters throughout Indiana, Illinois and Davenport, Iowa are covered by the Local 705 contract (Chicago area) or the Local 710 contract (covering the rest of Illinois, much of Indiana, and Davenport).
Neither of these contracts is near settlement. Local 705 has not begun bargaining as Convoy goes to press. Many Chicago UPS Teamsters have made it clear they are not happy with the concessions in the national agreement—including no new full-time combo jobs, various two-tier concessions, and weak language on excessive overtime, supervisors working and other problems.
Their goal is to avoid these givebacks in their contract.
At recent Local 705 meetings, local leaders have reported that they are negotiating with UPS over major grievances, after threatening to strike over the company’s failure to comply with past grievance decisions and assignment of work outside the bargaining unit.
The local has passed out bulletins to UPS Teamsters notifying them of a potential strike and copy of the strike notice given to management.
Under the Local 705 contract, the union can strike if management fails to comply with grievance decisions.
November 21, 2007: Members of the International Brotherhood of Teamsters ratified by a 65 percent approval rate a new national five-year contract with United Parcel Service that provides wage increases of $4 per hour over term while securing existing benefits, the union announced Nov. 20.
However, the rejection of five regional or local supplements to the contract will require renegotiation and re-voting before a settlement can be finalized to cover 240,000 IBT-represented UPS employees nationwide, according to IBT spokesman Bret Caldwell.
With about 90,000 members voting, the union estimates that 65 percent of those voting favored approving the national contract, Caldwell said. Final numbers were not immediately available, he said, because the union hired an independent organization to count the votes, and that group will not report final results until after all details have been confirmed.
"But any time you get two-thirds of the members voting in favor of a contract, it's a strong endorsement," Caldwell told BNA. About 190,000 ballots were printed and mailed to active members, so it appears that the participation rate among eligible voters was about 50 percent, he said.
IBT members voted on a total of 32 regional or local supplements to the national contract, Caldwell said, and all but five of these were approved. Members rejected five agreements--the IBT Local 804 supplement, the central Pennsylvania area supplement, the western Pennsylvania supplement, the IBT Local 926 carwash supplement, and the Hawaii rider--and these will all be renegotiated and re-voted, Caldwell said.
UPS Confident on Year-End Target
UPS spokesman Norman Black told BNA Nov. 20 that the company "is very happy to learn that the national master contract is being approved by a wide margin."
"We understand that there will be some supplements [to the national agreement] to be discussed with the union, and we will be meeting with them soon to see what needs to be done. We are absolutely confident that we will be done before the end of the year," he said.
Black added that contract supplements had been rejected in ratification votes many times in the past, "so there is nothing unusual in this for us." The company remains confident that all issues can be resolved and that the company can meet its target date of Jan. 1, 2008, to have all elements of the new agreement ratified, he said.
"The goal is that we get these [outstanding supplements] resolved," said IBT's Caldwell. "I think it is up to UPS how fast or how easily this gets done."
Tentative agreement on the national contract, the supplements and riders, and a related agreement regarding the Central States Southeast and Southwest Areas Pension Fund, was announced Oct. 1.
The proposed national contract, supplements, and riders increase wages and secure existing benefits, while a separate agreement allows UPS to exit the Central States pension fund by making a one-time cash payment of $6.1 billion to cover its withdrawal liability for workers who are pension plan beneficiaries
Unofficial vote totals were posted on the IBT Web site Nov. 20, and on the Web site of Teamsters for a Democratic Union, a rank-and-file organization that has been strongly critical of the UPS contract.
In the New York City area, a proposed supplement that would cover about 7,000 UPS employees represented by IBT Local 804 was voted down 2,203 to 895, TDU said. Local 804 voters also turned down the national agreement in a 2,307 to 802 vote, according to TDU.
The union's proposed Central Pennsylvania Area Supplement, which would cover seven IBT locals, was turned down by a vote of 1,269 to 994, IBT said. The national agreement was rejected by voting members of those seven locals 1,273 to 985, according to IBT.
The proposed Western Pennsylvania supplement, which would cover eight union locals, was voted down 1,024 to 979, IBT said. The voting members in that area, however, approved the national agreement 1,030 to 972, the union said.
TDU spokesman David Levin said the voting results in the New York area were influenced by criticism of the contract by TDU and others. TDU distributed flyers urging members to vote against the contract, he said, and promoted its opposition in face-to-face campaigning at worksites and union halls. One of the most controversial elements of the Local 804 supplement, he said, were restrictions on pension benefits for new employees.
TDU said the union's constitution states that the national contract cannot be ratified until all supplements are approved.
In addition, former Local 804 President Ron Carey, who also served one term as IBT general president, publicly criticized the proposed UPS contract, he said.
"I wouldn't say that Carey's criticism was responsible for the vote, but I do think it made a difference in the sense that members who were inclined to vote against it didn't feel like they were alone out in the cold," Levin said.
The other rejected agreements would have covered much smaller bargaining units, Caldwell said. The Local 926 Carwash agreement, covering some employees based in Pittsburgh, and the Hawaii Rider would have covered only several hundred IBT-represented workers combined, he said.
November 20, 2007: Working Teamsters at UPS can’t depend on top union officials to have our backs, and we can’t wait until there’s a crisis to get organized.
That’s the lesson of the UPS contract.
In spite of its massive concessions, the contract is headed toward passage with 65 percent of the vote nationally. It is not ratified yet, because Teamsters have voted down three supplemental agreements in Pennsylvania and New York.
If we want to stop future givebacks and enforce our contract, we need a bigger, stronger network of UPS stewards and members. And that means building a stronger TDU.
Members, Make UPS Deliver Mount Strong Challenge
Through Make UPS Deliver, stewards and members got contract information in the hands of tens of thousands of Teamsters.
Where UPS Teamsters mounted an organized Vote No effort, the contract was contested and sometimes defeated.
Members voted down the contract in several UPS locals, including Kansas City, St. Louis, Cincinnati, Omaha, San Francisco, Washington D.C., Allentown, Harrisburg, Worcester, Syracuse, and Knoxville, among others.
In New York Local 804, the largest UPS local in the East, 7,000 Teamsters overwhelmingly the contract down by nearly 3 to 1.
In a few key locals where local officers actively spoke out against the contract, they made a big difference, fueling the defeat of the supplements in Central and Western Pennsylvania—and nearly overturning the supplement in Northern California.
In locals where Make UPS Deliver materials weren’t distributed and members only heard the company and union sales job, the vote was a lopsided—with 10 to 1 margins and worse.
Why The Contract Passed Nationally
The biggest obstacle to defeating the concessionary contract nationally was the sheer size and scope of the Teamster-UPS sales job.
The company and the union reached every UPS Teamster with their Vote Yes campaign. Most UPS Teamsters received multiple mailings—including six separate mailings in the Central and Southern regions.
In contrast, our Vote No campaign relied on member-to-member communication. The fast track contract vote gave us limited time to expand our network.
The Hoffa administration’s miserable failure to defend Teamster pensions was another major factor in the contract vote. First, Teamster pensions were cut in the Central States and elsewhere after Hoffa promised they would be protected. Then our union failed to advance any positive plan for improving pensions without giving in to the UPS pension grab in the Central States.
With Hoffa and Hall offering no plan, no hope and no leadership, it is not surprising that the majority of UPS Teamsters voted for the contract in the Central States areas: the Central Region and the South.
Lessons for Working Teamsters
This contract shows that Hoffa and Hall cannot be trusted to fight for Teamsters at UPS—and that the majority of local union officials would rather go along with Hoffa than make a stand for the members they are supposed to represent.
That leaves UPS Teamsters with two choices: give up or get organized.
The company will continue to attack our pensions and benefits—and management will undermine the new contract every chance they get.
It is up to concerned UPS stewards and members to inform our co-workers, enforce our contract, and hold our union leaders accountable. Thousands of dedicated UPS Teamsters do this every day. The movement to beat this concessionary contract shows that we’re more effective when we work together.
That’s why Teamsters for a Democratic Union (TDU) launched the Make UPS Deliver website. We plan on keeping it going. But we want to do more than just share information in cyberspace.
Join TDU and Link UPS Stewards and Members Nationwide
TDU’s goal is to build a network that can link UPS stewards and members in every hub and building. You can be a part of making that happen.
Join TDU today. Help build a stronger voice and more power for working Teamsters at UPS.
Click here to Join TDU. $40/year for UPS full-timers. $25/year for UPS part-timers. Membership includes a subscription to our newspaper Convoy Dispatch and a free copy of Rank and File Power at UPS—a 70 page history of the fight for a strong union and respect on the job at UPS.
Click here to find out more about TDU’s UPS network. Send us a message and a TDU organizer will contact you.
Click here to read the full story at MakeUPSDeliver.org.
Click here for local-by-local results.
The 2008 vote count figures below are preliminary. Some numbers will be adjusted in the final, official tally.
Southern Supplement Results
Western Supplement Results
Northern California Supplement
Central Pennsylvania Supplement
Local 177 Supplement (New Jersey)
Local 804 Supplement (Metro New York)
Local 623 Supplement (Philadelphia)
Metro Philly Supplement
New England Supplement
Upstate New York Supplement
Western Pennsylvania Supplement
Local 926 Supplement
Central Region Supplement
Local 901 Supplement (Puerto Rico)
UPS Cartage Services, Inc. Supplement