http://www.logisticsmgmt.com/article/CA6469906.htmlTeamsters, UPS making progress on Central States withdrawal plan
John D. Schulz, Contributing Editor
Logistics Management
August 17, 2007
WASHINGTON—All shippers really need to know about the Teamsters’ contract negotiations with UPS and the freight carriers is this: There has been substantial progress on the union’s talks with UPS, its largest employer. There has been little if any progress with the unionized freight carriers such as YRC Worldwide and Arkansas Best.
The freight contract expires next March 31, and there isn’t even much of a timetable for the negotiations to begin in earnest. The UPS contract doesn’t expire until next July 31, yet complex issues regarding multi-employer pension plan withdrawal liability already have been discussed and foundations for agreement have been met.
Veteran negotiators who have hammered out contracts with the Teamsters say it figures the union is further along in talks on the contract that expires last. It’s really force of habit; in past years, the UPS contract has expired first and the trucking pact largely mirrored, at least in wages, the UPS deal. So despite the flip-flop in expiration dates this time around, the Teamsters seem intent on solving the complex UPS agreement first before moving to the freight pact.
Although non-union carriers can be expected to exploit the final year of the National Master Freight Agreement to divert freight away from unionized carriers such as YRC and Arkansas Best (parent of ABF Freight System), shippers should know this. There is scant chance of a strike in the freight sector and virtually zero chance of a strike against UPS. The last national freight strike occurred in 1994; the last UPS strike was in 1997.
Teamsters union President Jim Hoffa has struck a preliminary agreement with UPS over the withdrawal of UPS from the Central States Pension Fund, the largest in the Teamsters’ network of plans. The deal would allow UPS to take 42,000 Teamsters (out of a total workforce of more than 260,000) out of the Central States plan and into one controlled by UPS and the union. UPS contributes to 21 other Teamsters pension plans.
It’s been estimated that UPS could pay as much as $6 billion to withdraw from the Central States plan. Its reasoning for wanting out of this multiemployer plan is because of its growing withdrawal liability if it doesn’t act now. UPS is the financially strongest member of that multiemployer plan, and must make good on pension defaults from other bankrupt carriers.
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