Will There Be a Fightback at UPS?
If rank-and-file Teamsters can confront the package-delivery giant, they'll win better conditions for the whole industry.
This Monday, negotiations began between Teamsters and the package giant UPS for a new national contract. The formal exchange of proposals was in preparation for July, when the national master UPS contract will expire.
Teamsters general president James P. Hoffa — son of the infamous Jimmy Hoffa Sr — refused to release the union’s official contract proposals to general membership before presenting them to the company. Up until January 22, members had no idea what was in the proposals. Teamsters United (TU), the reform campaign working to dislodge Hoffa’s old guard from the union leadership, called this a “brownout.”
For the 250,000 rank-and-file Teamsters affected, this contract fight is an opportunity to turn the tide on years of concessions and win a better workplace. But Hoffa is afraid that activating member militancy might diminish his own power — hence the brownout.
TU, on the other hand, has embraced that militancy. In 2016, their candidate Fred Zuckerman, leader of Teamsters Local 89, where UPS’s massive Worldport distribution center is based, nearly unseated Hoffa, who remained in office thanks to a mere six thousand votes in a 1.4 million member union. Their challenge was motivated by Hoffa’s decision, six years ago, to ram a deeply unpopular contract loaded with concessions down members’ throats, as well as his lack of opposition to UPS’s widespread subcontracting of Teamster work.
Zuckerman and TU recognize that to win a good contract this time, they have to fight both the boss and their conservative union leadership. That’s why, in the runup to January 22, they held an organizing call with nearly fifteen hundred rank-and-file Teamsters.
Zuckerman used the opportunity to tell participants that this time — unlike in the last round of negotiations — rank-and-file Teamsters “have the strength to vote down” any national contract that’s not to their liking.
He also gave Hoffa a warning: “A storm is coming.”
Still Big Brown
Despite Amazon’s explosive growth, UPS is still the top dog of package delivery in the United States. With nearly 250,000 unionized workers in its package division and another 13,000 in its freight division, UPS is the largest private-sector employer in the country, a position once held by General Motors. “This [the national contract covering the package division] is the largest labor contract in the country. It’s a pace-setting for other Teamster contracts, and could be for the whole labor movement,” Ken Paff, a TDU national organizer, told me recently.
UPS, nicknamed “Big Brown” in the 1970s for the distinctive chocolate brown that colors its trucks and uniforms, hasn’t suffered a significant loss in decades. The historic Teamster strike of 1997, the 9/11 terrorist attacks, and the long Great Recession all failed to put a dent in its profit margins. Though its fourth-quarter 2017 profits aren’t available yet, at the end of its spring quarter it was already reporting $1.16 billion in profits.
Online shopping has drowned all the logistics giants in packages while making their profits balloon. On December 21 alone, UPS’s mammoth Worldport facility in Louisville, Kentucky processed 5.7 million packages, setting a new record. DHL, FedEx’s “Superhub” in Memphis, and Amazon’s air operations based at the Cincinnati/Northern Kentucky airport all experienced record volume as well.
To handle the holiday rush, UPS pushed its hub workers and package-delivery drivers beyond human endurance. Drivers were slammed with a seventy-hour workweek and one hub worker was crushed to death in Atlanta. It was a miserable working Christmas for UPS workers across the country, exacerbated by brutally cold temperatures in parts of the United States and catastrophic fires in southern California.
The misery didn’t end with Christmas. The Christmas shopping season (or “peak” in the UPS world) extends well beyond December 25. “While the day after Christmas used to be reserved for long return lines at department stores, the growth of e-commerce has changed when and how consumers return gifts,” Alan Gershenhorn, chief commercial officer for UPS, told the Washington Post. People were projected to return $90 billion worth of gifts in the two weeks following Christmas, most of it returned through the same logistics giants that delivered them.
The Washington Post, owned by Amazon’s Jeff Bezos, reported:
The company [UPS] expects to process 6 million returns this [first] week of January] and a record 1.4 million packages on Wednesday alone, which it has dubbed National Returns Day. Overall, UPS estimates it delivered 750 million packages between Thanksgiving Day and New Year’s Eve, up 6 percent from last year. The U.S. Postal Service, meanwhile, says online returns grew 26 percent during the last two weeks of 2017, and that it expects that growth to continue into January.
UPS’s windfall profits are further enriched by free money from President Donald Trump, via his historic tax giveaway to the rich. UPS CEO David Abney, who made $13.4 million in 2016, released a statement before Christmas:
UPS strongly believes the lower corporate tax rate will expand U.S. GDP, which increases our customers’ businesses activities. With the additional resources from tax reform UPS will expand and accelerate investments in our people, technology, transportation fleets, facilities and value-generating customer services, which will further stimulate job creation.
Abney’s promise to invest in “our people” is an empty one. While campaigning for corporate tax cuts last year, Abney was also boosting plans to further automate UPS jobs. According The Young Turks (TYT) journalist Steve Horn,
Abney does not appear to have suggested wages will go up at UPS. He told the Business Roundtable, “We’re in a reinvestment cycle here at UPS in the US, and [as] part of this tax reform, we’d like to bring some of those foreign earnings back and invest them into our network here.” One investment both companies are making is in increased automation.
“UPS has outlined plans,” according to Horn, “to invest more than half a billion dollars in automating processing at three major hubs.” Those three hubs are located in Atlanta, Georgia; Jacksonville, Florida; and Columbus, Ohio. UPS was granted a patent in 2014 that will eliminate “valuable time consumed everyday as transportation personnel contact dispatchers or others regarding their arrival and departure to such as hubs.” In a search of patent applications at the U.S. Patent and Trademark office, Horn identified at least twenty-one patent applications for automated scanning, processing, or delivery.
UPS has hinted at what’s to come in the national master contract, through the negotiations over local and regional supplements that began well ahead of Monday. In these two-dozen mini-contracts, UPS has already demanded concessions. Matt Taibbi, secretary-treasurer of the Providence-based Teamsters Local 251, told me,
UPS came to the table in New England asking for major concessions. They seem determined to anger every Teamster in their endless drive for more profit for shareholders. New England UPSers voted “yes” for the 2013 contract by wide margins. That won’t be the case if UPS persists in its demands for concessions. Members are furious at the demands for workweeks that undermine family life, and the proposal to reduce vacation pay. Demands to utilize more temporary employees year round will effectively eliminate full time job growth, a slap in the face to the large part time workforce.
In a statement posted on New England Teamsters Joint Council 10’s Facebook page, Local 25 president Sean O’Brien declared,
UPS’s PR people are telling investors about their record profits, while their negotiators are looking for givebacks from the people who busted their asses to make the profits. The New England team will not concede to any demand that does not protect, preserve and improve Teamster working conditions. We will say NO for as long as it takes to make it clear, Teamsters must share in the company’s wealth.
We are likely to hear more from O’Brien during the course of contract negotiations. The ambitious Local 25 president has made it very clear that he wants to succeed Hoffa as Teamster general president. But his dubious past leaves much to be desired.
O’Brien is a longstanding Hoffa loyalist and one of twenty-two vice presidents on the Teamsters general executive board. Upon being elected president of Local 25, he exhorted that “we need to go back to our old-school values.” These values include exhorting that his opposition in the union “needs to be punished.” What’s more, he chaired the last round of supplement negotiations — supplements that members repeatedly voted down for their concessions on health-care coverage.
In the early months of 2017, Hoffa appointed O’Brien package director, making him the lead negotiator for the 2018 national master UPS contract. It was an attempt to deflect attention from Hoffa after he nearly lost the 2016 election. For a short time, O’Brien lent some openness and publicity to the upcoming contract, even if his nationwide tour of UPS hubs focused more on his personality than shop-floor issues.
Yet he was removed from his post after he made an unforgiveable mistake: he reached out to Hoffa’s chief rival, Fred Zuckerman. “Hoffa removed O’Brien because of his aggressive stance with the company,” Zuckerman charged in a public statement. “Hoffa doesn’t like that and doesn’t give a damn about what the members want.”
Hoffa replaced O’Brien with Denis Taylor, leader of Baltimore Local 355, as chief UPS negotiator. Teamster spokesperson Bret Caldwell calls Taylor a “tremendous” labor leader, but to members, he’s a non-entity. Teamsters United won slightly more than 49 percent of the vote in Taylor’s own local in 2016. Many of Taylor’s own membership clearly have little regard for him.
This episode reveals Hoffa’s zombie leadership for what it is.
His most prominent allies have resigned, been suspended, or become permanent critics of the old guard. Hoffa is a much-diminished ruler, but he still holds the reigns of power. That puts UPS Teamsters in a terrible position for contract negotiations, and prevents changes in a labor movement facing existential challenges.
Still, with O’Brien breathing down Hoffa’s neck from Boston and Teamsters United organizing a national contract campaign, the outcome of UPS negotiations could be very different from six years ago. And if rank-and-file Teamsters win, so will workers everywhere.