UPS, Teamsters Begin Talks on New Labor Contract

This story appears in the Oct. 1 print edition of Transport Topics.

UPS Inc. last week began contract talks with the Teamsters union, while the company awaited additional developments in its planned $6.7 billion purchase of TNT Express N.V., its largest-ever planned acquisition.

UPS, the largest Teamsters employer, and the union initiated talks on Sept. 27, a full 10 months before the July 31 expiration. Neither side disclosed details about their bargaining agendas.

The discussions cover a total of 250,000 package delivery and less-than-truckload workers, accounting for nearly 20% of total union membership. There are separate contracts for UPS package workers and less-than-truckload Teamsters at UPS Freight. Both contracts expire on the same date.

Company spokesman Dan McMackin and union spokeswoman Leigh Strope declined to discuss the proposals that were exchanged.

“We are not really commenting on negotiations,” Strope said, pointing Transport Topics to statements on the union’s website.

Local union officials met on Sept. 21 and unanimously approved the leadership’s bargaining agenda, a union statement said on Sept. 24.

While union leaders declined to discuss specifics, the Teamsters for a Democratic Union group said on its Web site that issues being presented include improved pensions, creation of more full-time jobs for current part-timers and raising the starting pay for part-time workers that has been stuck at $8.50 per hour for 25 years.

Also on the bargaining agenda is protecting drivers from discipline that only was the result of information gathered through technology, TDU said.

Pensions were the focus of a recent announcement and were also a key factor in the current agreement.

The company on Aug. 24 announced a restructuring of the agreement affecting New England Teamsters. That included UPS’ plan to pay $2.1 billion over 50 years in withdrawal liability and “freeze” its liability in the current pension agreement affecting about 10,200 people.

UPS spent $6.1 billion to withdraw from the Central States Pension Fund and establish a separate retirement plan for UPS Teamsters in that region under the terms of the current pact.

Talks that produced the current agreement began in January 2007, with a tentative deal nine months later (10-13-07, p. 1). The timing of the 2007 contract talks followed a 2002 agreement that was reached near the expiration date and led to diversion of some cargo to competitors.

Meanwhile, TNT found itself looking for a new CEO after Marie-Christine Lombard resigned last week during the European Union’s review of competitive issues that could be raised by combining the two companies.

The departure caused a stir in Europe, but her leadership was praised by UPS CEO Scott Davis, as Chief Financial Officer Bernard Bot took over TNT’s top post on an interim basis.

“This is an internal matter for TNT Express which will have no impact on the proposed acquisition,” Davis said in a statement provided to TT. “Marie-Christine is an impressive leader.”

“She’s led the organization through tough economic times yet she’s never lost sight of what makes companies great — their people,” Davis said. “Bernard has been an integral part of the acquisition effort and demonstrated great foresight and integrity.”

However, TNT Chairman Antony Burgmans described her departure this way to Bloomberg News in an interview: “This is exactly the moment when you should show some backbone and character and that obviously didn’t happen.”

He added, “Now this is the difference between a real CEO and someone who shouldn’t really be a CEO.”

Burgmans said Lombard had agreed to stay until six months after the acquisition was completed and should have taken more responsibility, as 70,000 people are affected by the transaction, Bloomberg reported.

Both companies still are expecting an early 2013 approval following the completion of the regulatory review.

A combination of UPS and TNT’s package delivery services in Europe would virtually match DHL as the largest package carrier on the continent.