UPS plans to furlough at least 300 of its 2,800 airline pilots while searching for a solution withthe pilots’ union that would avert or mitigate the temporary layoffs before they take effect.
If the furloughs go forward, they would be phased, with the first 170 pilots receivingnotices in 2010. The initial group would be furloughed in May, the company announced yesterday.
During the last year, UPS has been working with its union, the Independent PilotsAssociation, to identify ways to cut operating costs in a bid to avoid any pilot furloughs(temporary layoffs).
Last June, the IPA identified significant savings through voluntary programmes such as pilotstaking short- and long-term leaves of absence; military leaves; job sharing; reduction in flightpay guarantees; early retirement, and sick bank contributions. As a result, UPS agreed not tofurlough any pilots in 2009.
The two parties have been working cooperatively ever since to identify additionalcost-cutting initiatives that would eliminate the threat of layoffs entirely. However, subsequentdiscussions have failed to identify sufficient operating savings, UPS said.
“Even though the economy has begun to turn around, UPS anticipates a very gradual recoveryand a continued need for belt-tightening,” said UPS Airlines President Bob Lekites. “This is apainful decision for our people, but one that is right for the on-going health of our business.
“But we haven’t given up on this process,” Lekites continued. “We continue to go well beyondour contractual obligation to seek a ‘win-win’ solution to avert furloughs.”
The planned furloughs are among many steps the company has taken over the past two years tomatch its resources to economic conditions. UPS has engaged in a company-wide, $1.4 billioncost-cutting effort that included a freeze on management salaries in 2009; suspension of the matchfor 401(k) plans; trimming capital expenditures, and retiring older aircraft.
A month ago, UPS announced that it will shed 1,800 managerial jobs across the country in areorganisation of its US domestic package business in April.
“Companywide, we will continue to evaluate all opportunities and make adjustments asnecessary to ensure our company is well-positioned to emerge stronger than ever as the economycontinues to recover,” Lekites added. “We applaud our pilots for the way they’ve joined with UPS intrying to tackle this problem and hope we can identify a mutually beneficial outcome.”
UPS is well recognized for its commitment to employees, and strives to build upon its unionrelationships to maintain its position as an industry leader. For example, UPS and the Teamstershave formed a Competition Committee to identify new ways of making UPS more competitive and tocreate jobs, both in its package operation and at UPS Freight. A similar process has been in placewith the International Association of Machinists for the employees it represents who help ensurethe efficient operation of the UPS network.
