UPS pilots ratify new contract after testy negotiations

<p>UPS Inc. pilots have approved a new contract with the world's largest shipping carrier that includes hefty pay raises, large signing bonuses and higher health care premiums. The deal ends a lengthy battle that was mired by threats of a walkout.</p><p>The Independent Pilots Association said Thursday that 56.5 percent of UPS pilots who voted approved of the deal, which runs through 2011.</p><p>The deal, reached after more than three years of talks, together with a tentative agreement between FedEx Corp. and its pilots, furthers a trend in recent years that has seen pay for cargo airline pilots shoot up while the pay of many commercial airline pilots has declined.</p><p>"The profit is so much greater in moving packages, freight and cargo than in moving human beings," IPA spokesman Brian Gaudet said.</p><p>Terms of the new UPS contract include immediate hourly pay raises of 17.7 percent for captains, Gaudet said. Pay for first officers will immediately rise by between 18 percent and 25.8 percent per hour depending on length of service. There also will be 3 percent annual pay raises for all pilots in 2008, 2009, 2010 and 2011, Gaudet said.</p><p>Health care premiums for family policies will increase about $200 a month for all pilots, Gaudet said. Signing bonuses ranging from $34,000 to $60,000 for pilots are also part of the contract, he said, noting that money will compensate the pilots in part for not getting raises since the last contract. Pilots also secured protections to make sure they have a hand in UPS' expanded international flying, the union said. Roughly 2,652 pilots were eligible to vote.</p><p>UPS pilots had been making on average more than $175,000 a year, according to the company. The new contract will boost average pilot pay to about $206,000 a year, UPS spokesman Mark Giuffre said.</p><p>The new contract technically covers eight years because of the three years the two sides went without a new contract, Gaudet said. In the previous contract, pilots also got a hefty raise up front and small raises in subsequent years, Gaudet said.</p><p>"From the beginning of our process, our pilots wanted to see a comprehensive contract. We call it a correctional contract," IPA president Tom Nicholson said in a conference call after the vote was announced. "We needed to make up ground."</p><p>Officials at Atlanta-based UPS said they were pleased by the deal being approved.</p><p>"We are thrilled to have a ratified contract," said Bob Lekites, vice president of UPS Airline and International Operations. "We are excited about standing shoulder-to-shoulder with our people and moving forward to serve our customers and grow our business."</p><p>Memphis, Tenn.-based FedEx and its pilots union, meanwhile, announced Aug. 27 that they had reached a tentative agreement on a new contract running until 2010. Details were not announced, but UPS' pilots union believes both companies' contracts are competitive.</p><p>While cargo airlines have been growing in recent years, many commercial airlines have struggled with higher fuel prices and competitive pressures. Pay for commercial airline pilots has been cut significantly at several major carriers which have filed for bankruptcy.</p><p>Gaudet said that while one part of the reason for the disparity is the cargo carriers' ability to more effectively pass along fuel price increases to customers, another is that for the seat area it takes to put a person on a plane cargo airlines can charge more for that space by filling it with packages and letters.</p><p>UPS and its pilots union had been grappling over pay, pensions, work rules and health benefits, among other things.</p><p>UPS, also known as United Parcel Service, and its pilots had been in federal mediated talks since June 2004. Its pilots contract became amendable on Dec. 31, 2003, and had remained unchanged since then.</p><p>At one point, the union had said it was considering asking for release from federal mediation so it could strike.</p><p>Nicholson said that while the talks were at times contentious, there aren't any hard feelings between the sides.</p><p>"It's not a bank robbery, it's not a holdup, it's a give-and-take process," he said.</p><p>Under the Railway Labor Act, the pilots couldn't strike while under the direction of the federal mediator. The mediator never released the sides from talks, which continued and were ultimately successful.</p><p>UPS shares fell 20 cents to $70.34 in early afternoon trading on the New York Stock Exchange, where they have traded in a 52-week range of $65.50 to $83.99.</p>

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