One of the largest and historically most powerful unions in the U.S., struck against the United Parcel Service, the company which ships 80 percent of all packages in the country. It was the first nationwide strike in the 90-year history of UPS, and involves more workers than any strike in this decade. It’s Our Contract, We’ll Fight for It said Teamster signs. It’s more than just a contract dispute, and what’s needed is a fight to win this key labor battle. We’re striking for every worker in America, said a picketing UPS driver in Atlanta.
He’s right, and then some. All working people, minorities, immigrants and every other oppressed sector in this country have a stake in this struggle. We must prepare now to come out and defend the UPS strikers against the blows that the bosses and their government are already preparing. A 21-year UPS driver picketing outside the UPS Metro facility at 43rd Street in Manhattan told The Internationalist: this is a standoff between labor and management–here it’s UPS, but it’s almost everywhere. The management at UPS looks at us with contempt. Deep-seated resentment against the highhanded UPS bosses and the sheer power of the unionized work force make this a chance to turn the tide of the more than two decades of defeats that the unions have suffered.
UPS was founded in 1907 by a 19-year-old Seattle teenager who employed a team of boys to deliver luggage, parcels, and store purchases, UPS matched company growth with innovation. The company pioneered the idea of consolidated delivery, which streamlines performance by combining packages addressed to the same neighborhoods. UPS introduced its service to the general public after World War II, and had its national network in place by 1975. Its international network was set up soon after.
In 1988, UPS received approval to operate as an independent airline, and it is currently the nation’s ninth-largest, even offering weekend charter flights. Package delivery for retail stores became the company’s focus, and in 1913 Jim merged with a competitor, Evert (Mac) McCabe, and the American Messenger Company changed its name to Merchants Parcel Delivery. Charles W. (Charlie) Soderstrom joined the firm and helped manage the company’s growing fleet of delivery vehicles. During this period, the company also pioneered the concept of consolidated delivery, combining packages addressed to a certain neighborhood onto one delivery vehicle.
The company extended operations to Oakland, California, and later to Los Angeles. In 1919, the name United Parcel Service was adopted. United because shipments were consolidated, and Service because, as Charlie Soderstrom observed, Service is all we have to offer. In 1929, the company opened United Air Express, offering package delivery via airplane to major West Coast cities and as far inland as El Paso, Texas. All UPS vehicles were painted the now-familiar Pullman railroad brown color.
By the 1930s, UPS provided delivery services in all major West Coast cities, with a consolidated delivery service in the New York City area. The first mechanical system for package sorting was developed, and a 180-foot-long conveyor belt was installed in Los Angeles. By the early 1950s it was clear that contract service to retail stores was limited and UPS managers began looking for new opportunities. They decided to expand their services by acquiring common carrier rights to deliver packages between all addresses, for any customer, private or commercial. This decision placed UPS in direct competition with the U.S. Postal Service.
In 1953, UPS resumed air service, offering two-day service to major cities on the East and West coasts. The service, called UPS Blue Label Air, grew and in 1978 the service was available in every state, including Alaska and Hawaii. To ensure dependability during the time of federal deregulation of airlines, UPS began to assemble its own jet cargo fleet, the largest in the industry. With growing demand for faster service, UPS entered the overnight air delivery business, and, by 1985, UPS Next Day Air service was available in 48 states and Puerto Rico. Alaska and Hawaii were added later. UPS entered a new era with international air package and document service, linking the U.S.
and six European nations. In 1988 UPS received authorization from the Federal Aviation Administration (FAA) to operate its own aircraft, thus officially becoming an airline. UPS Airlines was the fastest-growing airline in FAA history, formed in little more than one year with all the necessary technology and support systems. In 1990, UPS introduced scheduled service to Asia and Mexico with expanded air express service by jet, feeder or contract airlift to more than 200 countries and territories.
In 1997, UPS Airlines embarked on a unique program to reconfigure five 727-100 cargo aircraft passenger planes and charter them to cruise lines and travel groups. During the week, these planes fly packages throughout the U.S., but on the weekends when they aren’t in use, the aircraft are converted to comfortably accommodate 113 passengers with spacious seating, complete with overhead storage bins, fully equipped galleys for hot meals and three lavatories. Today, UPS Airlines is the ninth largest airline in North America. In the 1980s UPS entered the international shipping market.
Today, UPS operates an international small package and document network in more than 200 countries and territories, spanning both the Atlantic and Pacific oceans. With its international service, UPS can reach over four billion people. In the mid-1980s, UPS shifted its emphasis from an operations focus to a customer needs focus. Today, UPS provides many customer solutions. One such example is UPS OnLine Tools. UPS OnLine Tools are free Internet-based applications that allow companies to embed UPS shipping functionality directly into their own Web site.
This offering allows UPS to achieve its goal of helping customers to enable global service. UPS continues to expand its services by developing new categories of business. UPS Logistics, developed in 1993, provides global supply chain management solutions and UPS Worldwide Logistics provides consulting services based on the customer’s individual needs. In 1995, UPS acquired a company called SonicAir, making UPS the first company to offer same-day/ next flight-out service and guaranteed 8 a.m. overnight delivery.
In 1998, UPS Capital was founded and its mission is to provide a comprehensive menu of integrated financial products and services that enable companies to grow their business. In February 2000, UPS formed UPS e-Ventures which is the research, development and incubation arm of UPS e-commerce. The first company this new group is developing is UPS e-Logistics. UPS e-Logistics plans to provide complete, end-to-end business solutions for the rapid, low-cost launch of e-commerce startups UPS believes its most valuable asset is loyal and capable people.
The dedication of UPS people is achieved through two long-standing company policies: employee ownership and training. A commitment to life learning means being prepared for continuous formal education and training. UPS invests more than $300 million dollars a year in employee learning programs. Managers can take advantage of full-tuition reimbursement for advanced degree programs that apply to their careers. Drivers go through extensive training both in the classroom and on the road. This training is done to ensure efficiency and to guarantee customer service and satisfaction.
At UPS, every member of the senior management team began their careers at the front lines of the company as package sorters, drivers and administrative assistants. The idea is that you can’t manage a business unless you know how it operates. This company sounds like one that you would want to jump right in and work for. They seem to be there for their employees. You ask yourself then, what brought on this strike? Union members were waiting for a contract but UPS could not meet their requirements before the deadline, therefore a strike. The demands that the Teamsters called for were, for more full-time workers; a company proposal to take over the workers’ pension plan; and proposals for improving workplace safety.
The union wanted a large number of part-time jobs converted into full-time positions, with full benefits in order to provide more job security. Why did UPS hire only part time emloyees? Of the 46,000 workers UPS had hired between 1993- 1997, more than 80 percent were part-timers. The reason behind this type of hiring , UPS says, is in order to keep up with its non-union competitors, it has been forced to hire more part-time workers. Fifteen days later, workers prepared to don their brown uniforms and return to their jobs. The Union took the first step to ratify the settlement and to get a contract signed.
Among the major provisions of the tentative labor agreement between UPS and Teamsters union were: the contract would be for 5 years, not the 2-3 year deal that the Teamsters asked for. To change 10,000 part time jobs to full time jobs. This was a plus for the teamsters since UPS wanted only 1,000. The Teamsters will still keep control of the multie- employer pension plan that is solely for UPS workers.
Pension Benifits will also increase. Increased hourly wages by up to 36%, so over 5 years full- time workers wil gain $3.10 an hour, with the top rate reaching $23 an hour. Part- time workers will gain $4.10 an hour with the top rate reaching $15 an hour, which is up from the $8 an hour before the strike. After the strike UPS hurried to rebuild its business and make up a $1 billion shortfall in revenues. The 1999 year’s financial performance indicated that the company seemed to be recovering spectacularly. However, the improved financial performance has not necessarily meant improved employee relations.
Negative effects of the walkout remained, despite the management’s efforts. Empoyee moral is up but it was met with claims of non- compliance to the agreement. Drivers were still complaining bitterly to union officials and UPS management about productivity demands (employee performance) and what they saw as a decline in service. Many drivers felt the increased productivity levels since the strike were unattainable, and there were reports of nervous breakdowns because of the pressure put on drivers to produce.
Management however, pointed to the company service index being at its highest level ever while the company had cut back on service. As drivers urged the company to choose between increased productivity or better service the response has been give us both, because you can’t be productive without good service. UPS management saw the union as us-versus-them and were not going to engage in win/win strategies. They also reported that since the work stoppage they had not had an inordinate increase in the number of calls to their toll-free business-conduct line where employees could call in anonymously and report their feelings or any incidents.
There had been a record number of grievances since the strike due to petty harassment and post-strike vindictiveness on the part of some supervisors claimed teamster Rand Wilson. Some progress was being made, admitted by both sides, but lots of bad blood remained. Supervisors were called upon to keep the business running during the strike, and were subjected to harsh language and threats when they crossed the picket line to do so. Even UPS drivers admitted that some very nasty things were said during the strike, and there are still some sores there that are mending.
UPS hired consutants and they stated that employee morale was higher than ever but, some union activists said that there was still widespread dissatisfaction. Somewhere between the two, layed the truth. UPS handed out surveys which revealed that employees felt wounded by the blows to the company’s reputation and problem areas surfaced around improving communications. Conjugate that and it seemed to be that employees were still proud to work for UPS, but needed positive reinforcement. Workers in the field were reported to still respect the head people in the company, who came up through the ranks.
However, there were some workers who felt that top executives were out of touch with the workers themselves. Union leaders, activists, UPS leaders and supervisors all voiced optimism for the future.While UPS looked to dismiss last year’s strike as a minor glitch, much of the bitterness and anger lingered on. There seemed to be a trend of policy makers for both the union and UPS management to downshift their relationships from collaborative to confrontational and splits between the rank-and file workers and supervisors, as well as workers and UPS itself are likely to increase. All in all, it seemed profits had increased, and the dynamics of labor relationship at UPS were still looking for a degree of stabilization and the Union had lost over $3.5 million a year in dues. So where is UPS now? Since the strike they have gone public, selling 10% of its stock on the New York Stock Exchange to the public, making it the second largest initial public offering by an American company in history.
Today, UPS is not just in the delivery business, but in the customer satisfaction business, and customer needs will continue to be the company’s driving force. The highest priorities for UPS over the next five years will be: growing internationally, deploying technology that will allow UPS to continue introducing new services; to electronically connect customers to UPS so even more comprehensive information about shipments is available; to continue creation of new services and solutions for customers that add value all along the supply chain, and, finally, to move further into all three converging flows of commerce – the flow of goods, information, and funds. UPS has always been a good company since they first days of business in 1907. They expanded tremedously. Even though have had their shares of setbacks, they still remain strong and have succeeded through it.
The strike hurt them the most and they have overcome it to bring their company to the top. UPS is and always will be a household name. I remember running out of the house to that oh- so- familar brown uniform and truck when I was a kid and hopefully my kids will too.
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