UPS, Teamsters agree on tentative contract for mechanics

The Teamsters Local Union No. 2727 has come to a tentative contract agreement with UPS that will make 1,300 UPS aircraft mechanics the “highest paid aviation mechanics” in the United States, a statement from the Teamsters said.

Upon ratification, employees will receive an immediate 16 percent pay increase as well as retroactive pay for all hours worked from Nov. 1, 2013 – the day the current contract became amendable – to the day of ratification. In addition, employees will receive 3 percent raises each year.

The deal will also mean “improved retirement security,” a premium-free healthcare package and an increase in the company’s contributions to employee pensions.

The statement said that full details of the tentative agreement will first be disclosed Local Union No. 2727 members, who will vote on moving forward to ratify the agreement in September.

UPS released its Q2 2018 financial results late last month, which showed a 13 percent decrease in operating profit compared to the same period last year. The company said the contraction is attributable to increased costs like higher fuel surcharges, project related costs, and labor-related items like pension expenses.

Assuming the Teamsters’ proposed contract goes through next month, we will see these increased costs play into the operating profit in coming quarters.