UPS Talks to Present Hoffa With Key Test

The Teamsters union and United Parcel Service Inc. are back at the bargaining table in their first major matchup since 1997, when a 15-day strike disrupted U.S. commerce and raised hopes for the renaissance of organized labor.

The negotiations pit a storied union against one of the nation’s largest employers, raising issues familiar to many American workers: rising health-care costs, part-time work and the recessionary drag on wages.

They also will be a key test of the leadership of International Brotherhood of Teamsters President James P. Hoffa, who must prove to skeptical UPS employees that he can be as aggressive as his predecessor and former rival, Ron Carey.

“This is the first big Hoffa battle,” said Tom Juravich, director of the Labor Center at the University of Massachusetts, Amherst. “He’s got to deliver enough so he can legitimately claim victory. If he doesn’t, I think the dissent in his union will grow.”

At the same time, Hoffa’s personality is far less combative than Carey’s was, and he has shown himself ready and willing to work with employers, as evidenced by the Teamsters’ successful lobbying to help open China to UPS.

UPS increasingly is important to the Teamsters, which has shrunk in size over the last two decades as the package delivery company grew. Company spokesman Norman Black said UPS has been the union’s sole growth engine in recent years. Now, with 230,000 represented employees, the company has the largest single group in the 1.4-million-member union.

“Both sides have a new appreciation for how our futures are inextricably linked,” Black said.

Still, Hoffa, who sat down to his first bargaining session last month with 60 union subordinates at his side, already has come out swinging. “We’re going to be asking for a lot of money,” he said in a telephone interview. “We think our people are behind for the kind of work they do. Look at the profits this company is making. The workers should share in that too.”

Although Hoffa talks tough, Atlanta-based UPS is portraying the negotiations as amicable and destined for early resolution. The company, which ships 13.6 million packages a day, lost an estimated $750 million in revenue during the strike and spent months afterward rebuilding customer trust.

Black said thousands of customers who were stranded in 1997 still hedge by sending a portion of their business to other carriers. The last thing the company wants is to give them a reason to divert more of it.

“Our employees are the best, and they will be rewarded for being the best,” Black said. Still, he noted that the economy is in recession and rivals such as FedEx Corp. are nipping at UPS’ heels. “We are not asking for rollbacks even though we are in a recession. We are not going to call for any reductions in benefits. We will reward our employees while still maintaining our ability to compete.”

The current contract expires at midnight July 31. Business analysts and labor experts said they expect negotiations to continue at least until midsummer, despite UPS’ pledge to wrap up early.

Already, dissidents within the Teamsters are pressuring Hoffa to go slow, arguing that the union’s clout grows as the threat of a strike increases. In a recent newsletter to UPS employees, the Teamsters for a Democratic Union, which opposed Hoffa in the last two union elections, wrote, “We need to organize to show UPS that we won’t settle for anything less than what we deserve. And we need to tell top union officials that we will vote down any contract that doesn’t meet our needs.”

So far, only noneconomic proposals have been exchanged. The thorny issues of wages, benefits and pension contributions will be among the last to be addressed.

Black said UPS wages are the highest in the business. Full-time drivers earn on average $23.11 an hour, compared with $15.72 an hour at FedEx and $19 at the U.S. Postal Service. Benefits also are “dramatically better” than those offered by competitors, he said.

But part-time drivers, who represent 58% of the 230,000 Teamsters-covered workers at UPS, earn substantially less, starting at $8.50 an hour, which Hoffa claims is an industry low. Part-time wages average $10.72 an hour.

Part-time work was a leading issue in the 1997 strike and one that resonated strongly with an American public that had watched jobs throughout the economy shift toward part-time, temporary and other contingent arrangements. To end the strike, UPS pledged to convert 2,000 part-time jobs to full-time jobs each year of the five-year contract. UPS later resisted the shift, saying business volume did not warrant the increase, but an arbiter eventually forced the company to comply.

The Teamsters head into this contract demanding the company move 3,000 more jobs to full time each year. Black would not address specifics, but said, “That depends solely on whether or not we have a growing business. You can’t create jobs when you’re shrinking.”

Another sticking point may be the Teamsters’ demand that UPS allow the union to easily organize the company’s fast-expanding side business of providing logistics planning for other firms. The union also is asking UPS to absorb any increases in health-care costs.

Although the number of workers alone warrants attention, these negotiations will be watched closely because of what happened in 1997. At the time, the strike--which received a surprising amount of public support--was seen as a watershed for organized labor. “I remember viewing it as the end of the decline,” said Harley Shaiken, a labor expert in the sociology department at UC Berkeley. “Looking back, it was a significant moment. It wasn’t a turning point. It stopped the bleeding but didn’t signal a turnaround in labor fortunes.”

Months after the strike, Teamsters President Carey, a former UPS driver, was caught up in a campaign fund-raising scandal that eventually led to his ouster from the union.

A new election followed, which Hoffa won despite having little support from UPS employees. Two months ago, he won reelection against the same rival, Tom Leedham. The vote count was by union local, and those representing UPS employees were about evenly split on Hoffa, according to both camps. The Leedham campaign focused strongly on how well Hoffa would handle these negotiations.