UPS Union Starts Strike Authorization Vote; No Near-Term Impact Expected

By Mike Esterl

Aircraft maintenance workers at United Parcel Service Inc. began a strike authorization vote Friday, but union and company representatives ruled out a work stoppage during the holiday-shipping season.

The International Brotherhood of Teamsters said the move affecting roughly 1,200 UPS airplane mechanics and support staff in the U.S. follows three years of protracted contract negotiations and continued disagreements over wages and health benefits.

Under U.S. labor law governing airline workers designed to keep traffic and commerce moving, unions can't unilaterally go on strike without government approval. Federally mediated talks are scheduled to continue through at least December.

"There will be no impact on holiday shipping," said Mike Mangeot, a UPS Airlines spokesman. He added the company remains optimistic about reaching an agreement.

Tim Boyle, president of Teamsters Local 2727, which represents the workers, said UPS hasn't offered a wage increase and that the union is opposing steep increases to health-care premiums. Talks on a new contract began in late 2013.

The company and union "basically hit a wall" in negotiations in March, according to Mr. Boyle, who acknowledged any potential strike wouldn't happen before next year.

The strike authorization vote began Friday and will run until Nov. 11. Results will be announced Nov. 14, when the union and UPS are scheduled to meet again at the National Mediation Board, according to Mr. Boyle.

UPS last had a strike in the U.S. in 1997, but that involved truck drivers, according to a company spokesman. Truck drivers are governed by different labor laws than airline workers.

Mr. Boyle said UPS aircraft mechanics earn about $50 an hour. He said that is about $5 less than at FedEx Corp., UPS's main parcel-delivery rival. UPS has proposed an immediate 430% increase in health-care premiums for retirees, up from $3,600 a year currently, in addition to reducing health-care benefits for existing workers, according to Mr. Boyle.

UPS said aircraft mechanics earn $105,000 a year, among the best in the industry. The company said Local 2727 members currently don't pay a health-insurance premium.

UPS also is in federally mediated talks with flight dispatchers. Pilots ratified a five-year contract earlier this year.

Under the Railway Labor Act, contracts for airline workers at the end of a contract remain in effect until a new pact is reached. Such negotiations often take years and workers have to clear several hurdles before they can strike.

The National Mediation Board hasn't released the UPS workers from its contract. If the government agency determines an impasse has been reached, it can order a 30-day cooling off period, during which time workers also can't strike.

The White House can appoint a presidential emergency board during the cooling-off period. Neither the company nor the union would be able to take any economic action until 30 days after the emergency board makes its recommendation. Congress also has the right to intervene in any strike.

Write to Mike Esterl at mike.esterl@wsj.com

(END) Dow Jones Newswires

October 21, 2016 16:43 ET (20:43 GMT)

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