COURSE PROJECT
Anal Patel
UPS STRIKE
Date: - 10/10/2011

Table of Content:-
INTRODUCTION……………………………….……………………………PAGE 3.
BACKGROUND……………………………………………………………...PAGE 3.
STRIE SETTLEMENT…………………………………………..………….PAGE 7.
RECOMMENDATION / STAND POINT……….………………………….PAGE 10.
CONCLUSION……………………………………………………………….PAGE 13.
REFERENCE…………………………………………………………………PAGE 13.

INTRODUCTION:-
The strike against United Parcel Service conducted by the Teamsters was seen as both disruptive and successful. It was disruptive to the national shipping patterns and so to business in general, yet the public supported the strikers over the company by a wide margin. This might have changed had the strike continued any longer than it did, but the Teamsters, as led by President Ron Carey, managed to make good use of public sentiment to pressure UPS to settle the strike. From the first, the Teamsters had the high ground given the nature of the dispute and the fact that the public was also concerned about the issue of part-time work and the way companies were using part-time workers to avoid paying full price for full-time employees in the same jobs. UPS said the strike cost them about $650 million in lost business. The union paid about $10 million in strike benefits to members who got $55 a week for manning the picket lines.
An analysis of the UPS strike shows that it is a case of hard bargaining in which the Teamsters benefited from being able to generate public support and also from the good fortune of the time of year so that the story remained on the front page for just the right amount of time. It was won with massive public support and the full backing of the AFL CIO and, in its meaning for the future of labor and the progressive movement; it will likely be remembered as a crucial turning point for an upswing in activism and success. BACKGROUND: -
In early August of 1997 the United Parcel Service (UPS) had a predicament on its hands, a teamsters strike. UPS, the world's largest package distribution company was coming off a year [1996] in which they reported sales of $22.4 billion. UPS Employed 75,000 management and non-union employees compared with 185,000 teamsters who are part of the AFL-CIO that were going on strike. The teamsters rejected a contract extension offer from the company leaving the fate of millions of packages carrying everything from lobsters to laser printers up in the air.
Tensions between union supporters and management began mounting in the years preceding the strike. In April of 1994, the International Union led a three-week strike against major tracking companies in the freight hauling industry in attempts to stop management from creating $9 per hour part-time positions. This would only foreshadow battles to come between management and union. Later, in 1995, Teamsters’ mounted an unprecedented national union campaign in attempts to defeat the labor-management "cooperation" scheme that UPS management tried to establish in order to weaken the union before contract talks (Witt, Wilson). This strike was distinguished from other strikes of recent years in that it was an offensive strike, not a defensive one. It was a struggle in which the union was prepared, fought over issues which it defined and one which relied overwhelmingly on the efforts of the members themselves.
The Teamsters’ campaign at UPS was unique in that there were many special circumstances surrounding it. UPS controlled 80% of the ground package delivery business, which ensured them that a strike would have a significant impact on the economy and pressure the company to settle. The company was not a conglomerate that could withstand the walkout since it did not have other lines of business. Also, UPS delivers to every address in the U.S., adding a hometown story in most cities and towns. The last circumstance was the fight was taking place during August when Congress is out of session, making it easier to gain national attention (Witt, Wilson).
This strike was a battle over several issues. One factor that escalated the strike intensity was the pensions’ battle. Billions of dollars in pensions were on the line. The Teamsters were reluctant to allow UPS to withdraw from the multi-employer teamsters-controlled pensions plans. UPS proposed a plan that would increase the monthly pension benefits for full and part-time employees an average of 50 percent. The current pension plan benefited thousands of teamsters’ retirees that never even worked for UPS. Basically, UPS wanted UPS dollars to go to UPS people (UPS vs. Teamsters). Before the strike, in many regions UPS participated in multi-employer benefit plans in which several shipping employers jointly pay for employee benefits. If one employer goes out of business or gets behind on payments, the other employers must compensate for the loss. This explains why it is said that UPS pays for the retirement and benefits of people that never worked for them (Business News New Jersey).
Another issue in negotiations was full-time versus part-time positions. UPS employees argued that too many workers were working 35-45 hours a week, often at two different jobs, for part-time pay. Having about two-thirds of all teamsters being part-time this was a central issue. They wanted these part-time positions to be converted into full-time positions. UPS claimed that it did not want to guarantee full-time positions because of fluctuations in work and they wants flexibility for competitive reasons (UPS vs. Teamsters). Along with full-time positions and the pension arguments, strikers wanted limits on giving work to subcontractors, and health and safety improvements.
The strike began 15 days ago, August 19th 1997 when 185,000 UPS workers represented by the Teamsters Union walked out on the UPS Company. It was the largest strike in the U.S. in over a decade, disrupting the delivery of millions of packages throughout the country every day for more than two weeks. One statistic alone gives a sense of the impact. UPS controls 80 percent of all package deliveries in the United States, so there was hardly a community or a business anywhere that was not affected. The walkout centered on two key issues the increasing use by the company of part-time workers and control of UPS pension funds by the Teamsters Union. As part of today's settlement, the company agreed to increase pay for both part-time and full-time workers and to upgrade 10,000 part-time positions to full-time status over the next five years. The settlement also gives the union continued control over pension funds, despite the company's move to take them over. Reaction on the picket lines was generally positive.
John Cortez, a warehouseman for UPS has been surviving for five years on the same part-time job he got when he was young and single. Working 26-28 hours a week and no having a wife and kids Cortez claimed it is not enough hours to pay the bills. The waiting line for full-time jobs so long that it will be another five years before Cortez would achieve full-time status. Teamsters’ union strategists and the UPS bargaining committee took a look at the problem of part-timers like Cortez. Knowing that his future was up in the air, Cortez and others sharing his interests would unite and keep the union members on the picket line as long as necessary.
During the 15-day strike many businesses suffered. One business, Mail Boxes Etc., saw its shipping volume drop by 75%. Commenting on the situation, UPS stated that they diverted as much as they can of their shipping to other carries but it is difficult for other carriers to absorb 80% of the shipping for the entire state [New Jersey]. All over New Jersey companies ranging from pharmaceutical giants to small bakery shops faced the impact of the strike. With speculation surrounding government intervention in resolving the strike, UPS kept a skeleton operation going with management behind the wheels of the company's famous brown trucks. One company normally running with 150 local drivers moving 40,000 packages a day continued running with 80 drivers from the management staff (Business News New Jersey). Another industry affected by the strike was the movie business. One firm, Technicolor Entertainment Services, handles distribution for several major studios promised to hand carry film canisters on commercial airlines if necessary. A distributor for studios such as Disney, MGM, Universal, and Miramax Technicolor are using UPS for materials such as promotional displays for theater lobbies. Companies such as Technicolor typically already work against tight deadlines; the strike only made things worse. While customers attempted to find alternative ways of distribution other than UPS, the many competitors, the U.S. Postal Service, FedEx, Emery Worldwide, ETA Express, DHL Worldwide Express, and RPS Inc. But they are not nearly capable of handling the near 12 million packages that UPS shipped daily. FedEx was and remains the strongest and most competitive competitor. If nothing else, this strike alerted competitors to the profit opportunities in fight UPS for market share.
STRIKE SELLELMENT: -
Finally, UPS announced early in the strike that it would lay off several thousand workers due to lost business after any settlement. It tried to promote the organization of loyal workers, who mounted tiny picket lines in two places, urging a vote on the company's final offer. The move had a negligible effect. The 15-day walkout by the Teamsters, protesting stagnant wages and working conditions, cost UPS an estimated $200 million to $700 million in lost business and goodwill.
As the pressure to settle mounted at the strike's end, the company also announced that it was considering the use of replacements. That move, however, would have led to a total war with the union and the striking workers. Other companies have been willing to take that risk. When they have done so, however, it is almost always been a product of a corporate plan made well in advance to bust the union. Strikebreakers and security thugs are lined up before the conflict starts, with a plan for breaking the lines, and maintaining normal operations.
UPS had none of those things in place when the strike started. Still, it could have moved in that direction. But the strike was already costing the company $60 million a week, and a replacement strategy for 185,000 people would have multiplied it many times. And even with such a strategy, there was no guarantee that the company would survive. Eastern Airlines, Continental Airlines and Greyhound all disappeared or went broke as a result of the turmoil caused by attempted replacement.
After a fifteen-day strike, UPS agreed to the Teamsters' key demand: to create 2,000 full-time jobs from part-time jobs per year over the five-year duration of the agreement. Because the new full-time jobs will be created by combining and reclassifying existing part-time positions, however, the wage gains negotiated for current full-time workers will not accrue automatically to most of the newly created full-time positions. Teamsters and UPS management came to an agreement on a tentative contract. At the start of the strike the company offered to advance 10,000 part-time workers to full-time jobs as other full-timers retired or quit, while only agreeing to create 1,000 new full-time jobs. In the final agreement, 10,000 new full-time jobs are to be created over the next five years. Another incentive to the deal was that five out of every six full-time openings would be filled by part-time UPS workers. UPS originally wanted to subcontract out the jobs of feeder drivers, the people that drive big-rigs between terminals. Union officials fought against and defeated this. Existing full-time employees received wage increases totaling $3.10 over five years and full-time; high-seniority workers won substantial increases in contributions to pension plans. The union got full-time work while management got their workers back to work.
In determining who got the better end of the deal it could in different way. The union did get the full-time jobs they wanted, however the union members not seeking full-time work lost out in the deal. Both management and union were hurt in regards to lost business resulting from the strike. While it appears the union did get most of the things they asked for, they were negotiating quickly knowing that any time a back-to-work order by President Bill Clinton was possible. Both UPS and the Teamsters should be thankful President Clinton didn't distort the collective bargaining process by forcing workers back to the job.
Teamsters’ won this strike. They got the majority of their requests while giving little ground to management. The teamsters gave a little ground when they agreed to a five-year contract instead of the two or three year deal they were looking for. The union got UPS to create 10,000 full-time jobs from existing part-time positions compared to 1,000 which was originally proposed by UPS. Along with getting a slight increase in pay, the Teamsters’ got to keep their existing multi-employer pension plan UPS attempted to do away with, clearly another Teamsters victory. While UPS may have suffered some from pressure brought on by President Clinton, they got the Teamsters back to work. All in all, the union got almost everything they wanted with a little longer contract than they were looking for, clearly a union victory.
The Results of the Negotiation:- * 7 percent annual raises for part-time workers * A five-year contract instead of the three to four years the union wanted * Commitment to 20,000 new full-time jobs * The union still will have more part-timers at UPS than full-timers * Continued control of workers' pension funds * Full-time workers receive just 3 percent raises, one percentage point above the current low rate of inflation * Union workers became eligible to perform work modified by technological advancements. * Expansion of maternity and paternity leaves as approved under the Family and Medical Leave Act. * Prohibition of disciplinary actions against employees involved in on-the-job accidents and injury cases.

RECOMANDATION / PERSONAL STAND POINT:-
I believe that this strike was clearly; however the union decided they wanted to make a statement and I felt they were for the majority successful in getting what they wanted. The teamsters gave a little ground when they agreed to a five-year contract instead of the two or three year deal they were looking for. When UPS workers returned to work, they did so with the sense they had accomplished something important. It was the first such victory by a major U.S. union confronting a national corporation in 20 years. Even in the six years before the strike, UPS had accumulated almost five and a half billion dollars in profit. UPS did not appear to gain a lot from the deal, along with losing market share in the process a feel it was a slight loss on their part. There did not have to be a strike, but while in striking I felt that the union got their point across. Management should have examined the full-time/part-time issues more closely in attempts to satisfy more employees. If employees felt they were safe and secure with their work status I feel they probably would not have goe on strike. The significance of this confrontation is that it gives Teamsters hope that management can be overcome if the union power is strong enough and the cause is a viable one.
According to my stand point, UPS is a “Fortune 500” company, meaning it is one of the most profitable in the nation, boasting of a $1.15 billion profit margin prior to the strike. UPS is the largest parcel delivery service in the world. UPS was not forced into this confrontation by a weak financial picture. The company was at that time the dominant carrier in the package delivery industry, replacing the Post Office, and doing so at a profit. In 1997 it controlled 80 per cent of ground parcel shipping, and was moving into the air freight and overseas shipping business. They also help their customers with supply chain management, logistics, and financial services. UPS used to be a trucking company with technology, now it’s a technology company with trucks. UPS has lowest turnover rates in the industry and succeeds in developing a portion of its workforce for management positions each year. The company’s unique culture emphasized accountability and efficient execution at every level of the organization. One of the UPS key success factors is the way they manage their operations. I do agree of changes in wages of full-time drivers in five years will be paid $23 an hour, and part-timers will start at $8.50 an hour and eventually reach the $15 mark. By then, the pay of all veteran UPS workers will be enough to qualify as a decent wage. Perhaps if the strike had dragged on longer, UPS would have brought in replacements. But it didn't, and the union should realize how important that non-step was. Negotiation result came out after 15 days of strike and the Teamsters and UPS agreed to a new contract. I think they had prepared for the strike well in advance, organizing a series of meetings and demonstrations. It seemed as though the UPS strike might encourage other workers to fight over their own issues.
In the days following the strike UPS stepped up efforts to maintain its current customer base without losing a significant market share. UPS officials stated that they felt they could gain back nearly all small customers lost while possibly losing a few corporate clients. In efforts to reassure its customers in the days subsequent to the strike, UPS telephoned nearly 1.6 million customers to reassure them along with promising not to raise rates for the remainder of the 1997 year. The 1997 Teamster strike against UPS was not simply a victory, but a smashing victory for the US working class and therefore offers many valuable lessons for today’s labor militants, both with respect to the strategic orientation and the day-to-day tactics.

CONCLUSION:-
The UPS strike is a case of hard bargaining which proved successful because of the nature of the business involved, the state of the economy, the dearth of news in the country at the time, and the negotiating ability of leaders on both sides in 1997, September 1. All working people, minorities, immigrants and every other oppressed sector in US have a stake in this struggle. The Teamsters' strike against the United Parcel Service was the most important and far-reaching strike in decades in U.S. labor relations. The success of the company derives in part from an aggressive growth strategy based on hiring many part-timers to keep labor costs low. Galvin, K “It was not hard to convince the public that UPS was wrong to schedule thousands of people to work more than 35 hours a week, yet pay them half the full-time wage”. Clearly, there were some factors which were noting the control of the negotiators, and had process taken place at a different time the results may have been different. Turnover among part-timers exceeded 4 percent per year. The issues between workers and management came to a head in contract talks with the Teamsters when their pact with UPS expired on July 31, 1997.
REFERANCES:-
http://articles.sun-sentinel.com/1997-08-20/news/9708190354_1_ups-pension-plan-teamsters-union-strike-timers http://www.pbs.org/newshour/bb/business/july-dec97/ups_8-19a.html http://www.nathannewman.org/other/why_ups_strike_matters.html http://www.cnn.com/US/9708/13/ups.impact/index.html http://www.workerscompass.org/rl/robleum2007/teamsters1997_1_leumer.html http://www.clevelandfed.org/research/trends/1997/0997/ups.pdf http://www.heritage.org/research/reports/1998/03/the-ups-strike-labor-tilts-at-windmills http://www.isreview.org/issues/55/bigbrown.shtml
Labor Relations 13th edition A. Sloane, Fred Witney, Page 19, 109, 228, 250.
Johnson (1997). "Bundles of Troubles: UPS workers decide to strike."
Intelligencer Journal (August 1). http://www.channel2000.com/news/stories/news-970805-191537.html http://www.igc.org/dbacon/Strikes/07ups.htm