UPS air maintenance union threatens to strike

The union representing 1,200 UPS air maintenance workers is taking advantage of a shareholder meeting this week to pressure the board for a resolution to a three-year contract dispute, and threatening to move ahead with plans to strike if that fails. “We’re not willing to back off of this and we will strike over it,” Tim Boyle, president of Teamster Local 2727 told Reuters.

One point of negotiation where the union is especially intransigent is healthcare, specifically, maintaining air mechanics’ current health plans. Boyle said UPS was trying to raise the cost of health insurance by as much as 430 percent in the first year of a new contract, outstripping any wage increases.

“Teamsters Local 2727 has made it clear that our members will not accept cuts to our healthcare for retirees or actives while UPS reaps record profits,” Boyle said. “UPS is also proposing minimal pay increases that would actually reduce our members’ earning power.”

The union is publishing an an open letter to David Abney, UPS chief executive officer, in hopes of influencing board members at this Thursday’s meeting. Union members will also protest at the shareholders’ meeting in Wilmington, Delaware.

That said, launching a strike is complicated. Last November, the union voted to authorize a strike but the request denied by federal authorities, who cited the U.S. Railway Labor Act, which only allows strikes after it negotiations and mediation have failed.

If the two parties can’t compromise on members’ health plans when they next meet, May 11 and May 12, the union will once again ask again for permission to strike.

While UPS beat Wall Street predictions late last month, posting surging volumes and revenues, the company’s e-commerce and smart logistics investments are expensive, and affecting profits.

The integrator posted a 2.1 percent decline in operating profit in the first quarter of 2017, as well as a 2.4 percent decline in domestic business. The company remains sanguine however, assuring investors that the costly transformation is critical to the company’s long-term viability.