Teamsters, United Parcel Service avoid strike with tentative six-year contract agreement

By

Posted 8:59PM on Tuesday, July 16, 2002

WASHINGTON, D.C. - The Teamsters and United Parcel Service Inc., dodging a repeat of the devastating 1997 strike, announced a tentative contract agreement Tuesday that gives workers a 22 percent pay increase over six years and creates 10,000 new full-time jobs. The 210,000 UPS Teamsters still must approve the agreement, and vote results are expected in mid-August. ``This tentative agreement surpasses any contract ever negotiated at UPS,'' said Teamsters President James P. Hoffa. ``It is the richest contract in UPS history and will set the tone for all collective bargaining for years to come.'' The new deal offers larger pay increases and more benefits than the current contract, but it fell short of what the Teamsters initially sought in new full-time jobs. UPS also got the longer, six-year contract it desired for stability. The Teamsters had pushed for three years at the start of negotiations. Hoffa announced the contract details Tuesday with Michael Eskew, chairman and chief executive of UPS, at a Washington hotel where negotiators have bargained for the last nine weeks. It was the largest private-sector labor contract being negotiated this year. ``This agreement is good for our customers, good for employees and good for our company,'' Eskew said. ``It rewards our people for their hard work. It ensures our ability to continue providing the greatest value to our customers. And it enables UPS to remain strong in a very competitive industry.'' The boost in wages and benefits amount to an hourly increase of $1.46 per year over six years compared with an hourly increase of 98 cents over five years in 1997. The deal was reached Monday night, 16 days before the current five-year contract was to expire. Both sides said they were determined to avoid a repeat of the two-week strike in 1997 that cost Atlanta-based UPS $750 million and virtually crippled the package delivery giant. UPS customers worried about another strike had started defecting to rival carriers, and the company's second-quarter profits and package volume were down from last year. The 1997 walkout concerned the union's demand that more part-time workers be given full-time jobs. The union won 10,000 new full-time jobs after the strike. In the new contract, UPS agreed to create 10,000 full-time jobs for part-time workers in the last four years of the contract. The Teamsters initially sought 3,000 full-time jobs per year. The company also agreed to convert 10,000 nonunion jobs and contractor positions to union jobs. Workers on average will get a $5 per hour wage increase over six years. The average package delivery driver now makes $22.10 an hour. That pay will rise to $27.10 at the end of six years. Additional increases are built in if inflation rises. Part-time workers will see a $6 per hour increase over six years. Labor analysts said the contract was a solid one for the Teamsters. ``It gives them a decent pay raise,'' said Rick Hurd, director of labor studies at Cornell University. ``It's not an extraordinary pay raise, but it's solid.'' The length of the contract isn't what the Teamsters wanted, but it won't hurt the union, Hurd said. ``It solidifies a key relationship,'' he said. ``It means they don't really need to worry about this for a while. They can focus their attention elsewhere,'' such as on other contracts, organizing and politics. UPS also agreed to fully fund health care benefits without requiring a copayment. Part-time retirees also will receive health insurance for the first time. Long-term disability benefits were negotiated for the first time as part of the new contract, and limits on excessive overtime were set. Eskew said he was confident UPS would win back customers whose business went to rivals over strike fears. ``We're back in business and nobody offers better service than UPS,'' he said.