Union urging contract with UPS
United Parcel Service Inc., needs to finish contract talks by Oct. 1 to get an accord in place before U.S. pension laws change in 2008, the union’s lead negotiator said.
The Oct. 1 goal was disclosed by negotiator Ken Hall in a statement posted on the union’s Web site. Atlanta-based UPS and the Teamsters started bargaining in September 2006 to replace a six-year contract that can be amended starting Aug. 1, 2008.
The union is trying to beat the Jan. 1 effective date for federal legislation passed last year to shore up underfunded pension plans. The new law ”could affect members’ retirement security,” Hall said, without elaborating.
A quick agreement would help UPS, the world’s biggest package-delivery company, keep customers from diverting business to rival FedEx Corp. on concern about a possible strike, Hurd said. UPS employs 240,000 Teamsters members.
UPS gained 36 cents to USD 74.15 in trading Tuesday.
Black and union spokesman Galen Munroe declined to comment on details of the negotiations. Labor expenses make up 60 percent of operating costs for UPS.
The company and the Teamsters remain ”far apart” on numerous issues, said Hall, director of the union’s parcel and small package division. In his statement, dated Sept. 7, he said UPS’ latest offer ”falls short” in safeguarding members’ retirement benefits.
Among the issues in the talks is UPS’ proposed withdrawal from the Central States Fund, a multiemployer pension plan covering 42,000 Teamsters members at the company.
Union President James Hoffa told members on Aug. 31 that UPS should be allowed to leave the plan if the company puts ”a significant amount of cash” into a new fund. UPS may pay as much as USD 6 billion to exit the plan, analyst Thomas Wadewitz of JPMorgan Chase & Co. said in an Aug. 6 report to investors.
Any financial benefit UPS gains from exiting the Central States Fund ”should not be counted as part of the final economic settlement,” Hoffa said in a statement Tuesday. ”We are still expecting major economic improvements.”
Other Teamsters members at UPS belong to 20 other multiemployer plans.
