UPS makes 22 percent deal with Teamsters
By Mary Schlangenstein
Bloomberg News Service
WASHINGTON — United Parcel Service Inc. and the Teamsters agreed on the richest contract in company history, raising pay 22 percent over six years and creating 20,000 more union jobs at the world's largest delivery business.
Bloomberg News Service
The Teamsters valued the contract reached Monday at $9 billion, more than twice the size of the contract reached after a 1997 strike. United Parcel, which declined to project a value, said the contract provides a combined average wage and benefit increase of about 4 percent a year for full-time workers.
United Parcel Service chief executive Michael Eskew announces the new labor contract agreement at a Washington press conference with Teamsters leader James Hoffa next to him.
"In 1997, we hit a home run — today we hit a grand slam," Teamsters general president James Hoffa said at a Washington news conference also attended by Michael Eskew, United Parcel's chief executive officer. The accord covers 210,000 Teamsters members who still must vote on the tentative contract.
The contract would raise pay for full-time drivers by $5 an hour over its term to $28.11, the union said. The company agreed to convert 10,000 contractor positions into full- and part-time United Parcel jobs eligible for Teamster membership in the first two years. In the last four, the company will create 10,000 more full-time jobs by combining part-time positions.
United Parcel was able to secure a six-year agreement, the longest in its history. The union originally sought a three-year contract with 3,000 new full-time jobs each year. "We are delivering on UPS' promise to reward our people for their great work," CEO Eskew said.
In addition to the $5-an-hour wage increase, the value of company-provided benefits such as pension and healthcare contributions will rise by $3.75 an hour over the contract.
The agreement narrows the pay gap between full- and part-time workers by increasing part-time pay $6 an hour over the contract term. That amounts to 55 percent over the life of the contract, based on average part-time pay of $11 an hour, the union said.
About 115,000 of the Teamsters covered by the contract work part time, and the agreement would provide healthcare and pension improvements for part-time workers and those who retired as part-time employees.
"Since part-time work began in the early '80s, there has been a need to continually close gaps that were made," said Bret Caldwell, a Teamsters spokesman. "We made the biggest corrections ever in this contract."
The plan restricts mandatory overtime, adds long-term disability insurance and limits the company's ability to let non-union workers at subsidiaries take over jobs done by Teamsters.
One of the late changes made to the contract was an agreement to extend it by one year to six and convert a portion of the additional wages from a bonus favored by the company to an hourly increase, the union said. Forty-one regional contracts, known as supplements, also were negotiated, Hoffa said.
United Parcel is the largest employer of Teamsters, with 230,000 members working as drivers, clerks and package sorters and loaders. About 20,000 Teamsters at the company are covered by separate contracts to be modeled on the accord just reached.
