Federal Mediator calls for recess in UPS pilot talks

UPS (NYSE:UPS) today said the federal mediator in charge of negotiations between UPS and the Independent Pilots Association (IPA) has put the talks in an indefinite recess.

In the NMB’s notification to the parties, the negotiations have been placed in an indefinite recess as of December 23, 2005. Although no future mediation sessions have been scheduled at this time, the mediator indicates both sides should “re-evaluate negotiating positions with respect to the remaining issues and prepare to bring the negotiations to a successful conclusion.”

There can be no strike or work stoppage while the parties are in recess. UPS pilots are legally obligated under the Railway Labor Act to continue working under the existing contract during any recess.

A recess often is a normal part of the mediation process, allowing the company and the union time to evaluate their positions. It does not prohibit the two parties from continuing to talk.

“We made progress during talks this week,” said Bob Lekites, vice president of UPS airlines and international operations. “While the company and the union still have differences to address, UPS remains committed to continue negotiations until an agreement can be reached.”

The main contract items still on the table are compensation and benefits. UPS pilots already are among the highest paid in the industry, earning an average of $175,000 a year.

UPS continues to believe the federally prescribed negotiating process will result in a contract that best serves the interests of its employees, customers and shareholders.

Moving forward, the federal mediator will continue to control the timing and pace of negotiations. “The company remains ready and willing to meet at any time or place specified by the federal mediator,” added Lekites.

This is the second recess since the company and the union began talks under the auspices of a federal mediator. The previous recess was called in June 2005. While that recess lasted three months, there is no prescribed time period for a recess.

UPS Airlines is the world’s ninth largest airline. UPS is the world’s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS stock trades on the New York Stock Exchange (UPS), and the company can be found on the Web at UPS.com.

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For more information, contact:

Mark Giuffre
502-329-3060

Peggy Gardner
404-828-7123

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