Teamsters-UPS Pact Gives UAW Hope in Detroit Three Talks

News of the settlement covering more than 340,000 employees at UPS, while not directly applicable, does offer UAW bargainers a lift at a critical juncture in their own contract negotiations, Cornell University labor expert Art Wheaton observes.

Joseph Szczesny

August 1, 2023

4 Min Read
Fain O'Brien screenshot 2 (Teamsters)
UAW president Fain (left), Teamsters president O’Brien met in April.International Brotherhood of Teamsters

UAW President Shawn Fain often points to the International Brotherhood of Teamsters as the model for preparing for the difficult negotiations now under way with Detroit’s three automakers.

Despite differences, many critical contractual issues – such as two-tier wage schedules and the need for substantial pay increases by highly profitable companies – overlap, according to Fain, who offered his support to Teamsters President Sean O’Brien as that union bargained for a new contract with package delivery giant UPS. A tentative agreement was announced July 25.

News of the settlement covering more than 340,000 employees at UPS, while not directly applicable, does offer UAW bargainers a lift at a critical juncture in their own contract negotiations, a labor expert observes.

“Yes, great news (that) UPS and Teamsters avoided a strike,” says Art Wheaton, director of the Institute for Labor Relations at Cornell University.

“Yes, the deadline by Sean O’Brien a month before actual end of contract worked great. This does help UAW in their negotiations. It showed very profitable companies can (and should) increase wages and remain profitable. The preparation for strikes helps demonstrate that the bargaining team is doing whatever they can to get the most out of negotiations,” Wheaton notes in an e-mail to Wards.

“It will be a very tough negotiation but hopefully UAW can achieve many of their bargaining objectives,” he says. “Teamsters getting big raises and improvements in their working conditions and paid leave helps all workers.”

“I think at least one strike (is) still likely for UAW. I am not as sure they can avoid it,” Wheaton says.

The 150,000 UAW members at General Motors, Ford and Stellantis began negotiations for a new contract with the three automakers last month. The automakers’ current contracts with the union expire Sept. 14.

As the Teamsters did in talks with UPS, where profits soared during the pandemic, Fain has taken aim at the record profits of Detroit’s automakers – a quarter-trillion dollars in North America alone over the past decade.

“Autoworkers and our communities have yet to be made whole for the sacrifices we’ve made since the Great Recession,” the UAW contends. “At GM alone, executives have closed 31 plants over the last 20 years and are now enriching themselves through joint-venture battery plants that get billions from the federal government in taxpayer subsidies but pay poverty wages.”

UPS (getty).jpg

UPS (getty)

While the package delivery business and auto manufacturing are different, the existing labor agreements in the two industries have some similarities, including a two-tier wage system and provisions covering the pensions of current retirees.

All current UPS Teamsters, both full-time and part-time, will get $7.50 an hour in raises over the life of the 5-year contract, including $2.75 an hour on Aug. 1. UPS will eliminate the two-tier wage system in the existing contract and agrees to create 7,500 new full-time jobs by combining 15,000 part-time jobs, according to a contract summary released by the Teamsters.

Over 60,000 Teamsters in the 22 states covered by the IBT-UPS Pension Plan will get major increases to their pension benefits.

In addition, the tentative agreement will boost the pay of contingent employees, many of whom prefer part-time status, who fill in during summer vacation, holidays and Christmas.

The Teamsters for a Democratic Union, the independent group that has pushed to end corruption inside the union, describes the tentative agreement with UPS as the best in Teamsters’ history since it also includes curbs on mandatory overtime and on operator-facing cameras. UPS also has promised to air-condition its package delivery vehicles.

The UPS settlement also eliminates a potential threat to the shaky supply chain, which has dogged the auto industry ever since the end of the pandemic. Drivers from UPS, which deliver more than a third of packages shipped from place to place and business to business across the U.S., routinely call on most auto dealerships once or twice a day – mostly to deliver parts need to repair consumer vehicles, according to an informal survey by Wards.

“(Customers) are usually pretty understanding when you tell them there is a problem with manufacturing the part,” says Tisha McKinney, who works in the parts department at Miller Jeep in Denver, adding the dealership is always waiting for parts on back order to show up via UPS or another carrier.

“We usually have got a few parts on back order,” says Earl Carroll, who works in the parts department at Peterson Toyota-Lexus in Boise, ID. “We even have a dedicated delivery company for moving parts. But UPS handles about 10% of what we do.”

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