United Parcel Service yesterday announced it had reached a tentative agreement with the Teamsterstrade union on a new five-year labour contract covering some 240,000 package employees in the US.
The agreement, which still has to be ratified by the two parties, was concluded in talks thispast weekend and includes wage increases as well as significant contributions to healthcare andpension plans.
It allows UPS to pull employees out of the Central States pension plan, which handles fundsfor a number of logistics and freight companies, and establish a “jointly trusteed single-employerplan”, the company said. UPS will make a pre-tax USD 6.1 billion payment to the Central States tofacilitate the withdrawal.
The move would shed an annual expense that reached USD 1.4 billion in 2006, up 14% from ayear earlier, and not unlike the one that General Motors has negotiated with the United AutoWorkers (UAW) union, said the Wall Street Journal.
According to the Journal, UPS plans to set up a pool of money that will be run by theTeamsters. The capital will become the new health fund for employees at the company.
“This agreement will allow us to remain competitive in a challenging marketplace. And thefact that we have reached an agreement earlier than at any time in our history is a testament tothe skills and determination of all those involved in these talks,” said Mike Eskew, UPS chairmanand CEO.
The contract has been negotiated well in advance of the current agreement for full-time andpart-time employees, which runs out on 31 July next year. Most provisions of the new agreement willtherefore take effect on 1 August 2008, said UPS.
Going into talks on Friday, Ken Hall, director of the Teamsters’ parcel and small packagedivision, said: “I’m happy to report that we have made significant progress this week atUPS-Teamster national contract negotiations in Chicago. We are cautiously optimistic that atentative agreement could be reached this weekend.”
