This Package Is A Heavy One For The Teamsters

UPS has lots of cash, but the strikers are determined

You can say one thing for Teamsters President Ron Carey: He's got guts. In fact, the strike he called against United Parcel Service Inc. on Aug. 3 is so bold as to seem almost foolhardy.

It's true that the Teamsters drew first blood in the showdown. Almost all of UPS's 185,000 Teamsters have stayed off the job. And UPS is nearly shut down: Its 75,000 managers and nonunion workers are moving less than 5% of the 12 million packages that the Atlanta company typically handles daily, says Chief Executive James P. Kelley.

Still, UPS holds most of the cards. The financially troubled union's strike fund is empty, while the highly profitable UPS, Kelley says, "has enough cash to endure this strike if we have to." And union officers concede privately that it may be difficult to maintain resolve among part-timers, who frequently quit and have little loyalty to UPS or the union. What's more, Carey is weak politically: He won his post by a whisker and may be forced into a rematch against rival James P. Hoffa because of alleged fund-raising abuses in last December's election (box).

BIG RISK. There's a fair chance that the two sides will settle soon. Indeed, on Aug. 6 they agreed to go back to the bargaining table. Union officials say they came close to a deal in secret talks away from the bargaining table the week before the strike. But Kelley ultimately refused to budge, so Carey walked. That leaves the Teamsters chief running a tremendous risk, since an unsuccessful strike could undermine the union's clout. "UPS clearly has the ability to outlast us," says one Teamsters official, "and what scares me is that they may be willing to take a strike simply because they can afford to."

So why is Carey willing to fight against such odds? The answer stems from his years as a militant Teamsters dissident. A UPS driver for 12 years, Carey headed the Teamsters' largest UPS local for 24 years before becoming president of the Teamsters in 1992. He and other dissidents spent much of the 1980s challenging his predecessors for not taking on UPS, the union's largest employer. Carey took a first shot at UPS when the current pact was signed in 1993. He won better pensions but fell short of other goals, largely because he hadn't prepared members for a showdown.

This time, Carey has spent months bracing the troops for battle. He and other top union officers held hundreds of rallies at UPS facilities around the country. And they showered members with pamphlets and videos explaining key issues. The campaign has succeeded, judging by how few workers are crossing the picket lines. "I'm going to stay out as long as it takes," says Benny J. Truesdale, 28, who has worked as a part-time UPS driver in Norcross, Ga., for nine years while he waits for a full-time job.

Truesdale's problem is a key union gripe. Part-timers, who make up 57% of UPS workers, earn half the $19.95 an hour that full-time drivers make. In 1993, UPS agreed to convert 500 part-time jobs into full-time ones over four years. UPS has agreed to convert an additional 1,000 jobs, and also offered to give part-timers 10,000 full-time jobs that open up from attrition. However, Carey believes those jobs will turn full-time anyway, since attrition has opened up 13,000 full-time jobs since 1993. So he wants another 10,000 converted. But converting more jobs would "cut into our flexibility," says Kelley.

UPS did come close to meeting Carey's demands for full-time jobs, say officials, in secret talks during the last week of July between Dave Murray, the company's chief negotiator, and Ken Hall, his Teamsters counterpart. According to union officials, Murray also said UPS might drop its demand to pull out of the Teamsters multi-employer pension plan and set one up just for UPS workers. But when Carey and Kelley met on July 30, Kelley went back to the company's original position. Kelley doesn't deny this but says that Murray and Hall "were making a minimal amount of progress."

Since the strike began, Kelley has insisted that Carey let members vote on the contract the union rejected. But if UPS workers stay solidly behind the union, Kelley may decide that a lengthy strike would be too damaging to morale, even if the company has the financial muscle to win it. If that happens, the two sides likely would pick up where they left off in their secret talks and clinch a deal. And Carey would come out looking like a winner after all.

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