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UPS and Union Agree to Contract


A relieved United Parcel Service Inc. and the Teamsters union announced a tentative six-year contract deal Tuesday that raises employee pay and benefits by about 4% a year while eliminating the threat of a costly strike.

"I think it sets the bar pretty high for contracts around the country, and that's what we set out to do," said Ken Hall, lead negotiator for the International Brotherhood of Teamsters, which represents about 210,000 UPS workers.

Pay for full-time drivers would increase from $23.11 an hour to $28.11 over the six years, and their benefits package would grow by $3.75 an hour.

The agreement, which still must be ratified by members, followed a weekend of intense negotiations that brought the parties from near impasse to a deal that seemed to satisfy everyone.

"This agreement is good for our customers, good for employees and good for our company," UPS Chairman and Chief Executive Michael L. Eskew said in a statement. "And it enables UPS to remain strong in a very competitive industry, with the added stability of a six-year contract."

The company also agreed to convert 2,500 part-time jobs to full-time during each of the final four years of the contract, and to raise part-time pay an additional $1 an hour over the contract, Hall said. Part-time employees, who make up more than half of the company's work force, now earn an average of $11 an hour.

The stakes were high for both sides. UPS was determined to avoid a repeat of the 15-day strike in 1997 that alienated customers and cost the company an estimated $750 million. As the July 31 deadline neared, the company began to see skittish business owners already moving packages to other carriers, leading to a 4% drop in volume last month from the previous June.

"That was a wake-up call for both of us," said Norman Black, a spokesman for the Atlanta-based company. The announcement of lost business persuaded negotiators to work through the weekend, he said.

On the union side, Teamsters President James P. Hoffa needed to show members he could negotiate as good a deal, or better, than his predecessor and former political rival, Ron Carey.

Hoffa adopted a tough negotiating slogan--"Whatever it takes"--and staged an early strike-authorization vote. Hoffa, who oversees a 1.4-million-member union, sat in on talks during the final three days.

In the end, both sides were able to say they got what they wanted. The Teamsters said the contract brings members an additional $9 billion over the six-year term, compared with the $4.5 billion added under the five-year contract negotiated by Carey.

By settling two weeks before the current contract expires, and setting the contract term at six years rather than five, UPS can assure its customers of a long stretch of uninterrupted service. "We were able to show them that 1997 was an aberration," Black said, "and it wasn't going to happen again."

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