Teamsters Get A Hand Afl-Cio Pledges $10 Million A Week To Help Shore Up Strike Against Ups

The AFL-CIO on Tuesday gave the Teamsters a financial blank check in support of the strike against United Parcel Service, offering to help the union provide $10 million weekly in strike benefits, and thus raising the prospect of a lengthy walkout.

The company, meanwhile, warned that the loss of business caused by the strike will force it to lay off 15,000 workers by the end of the week. UPS is carrying only 10 percent of its regular volume of 12 million packages daily.

The dispute between the Teamsters and the UPS, which normally provides 80 percent of the nation’s package delivery service, is on its way to becoming the biggest, and most costly, strike in a generation.

“Before the week is out we will have enough loan commitments from other unions, large and small, to finance the worker side of this confrontation for a long strike if that’s what it takes,” AFL-CIO President John Sweeney said Tuesday, joining Teamsters President Ron Carey in a news conference at the union’s headquarters.

The Teamsters are paying $55 a week to the 185,000 workers who began their strike Aug. 4. AFL-CIO unions will help the Teamsters pay their striking members for “many, many weeks at $10 million a week,” Sweeney said.

“Because their fight is our fight, we are making this strike our strike,” said the AFL-CIO president, who pledged unlimited financial aid after conferring by telephone with many presidents of the AFL-CIO’s 78 member unions.

UPS warned that the strike is threatening the livelihood of the workers and the future of the highly profitable company. “And the longer it goes on, the fewer jobs we’ll have, so this is about destroying jobs at UPS,” James Kelly, the UPS chief executive officer, said on NBC’s “Today” show.

The UPS strike is probably the most economically significant since a 110-day walkout by 160,000 coal miners in 1978. There have been major strikes since then, including strikes against American Telephone & Telegraph in 1983 and 1986, but they had little impact on service because the phone system is highly automated.

The financial pledge from the AFL-CIO represents a judgment by the top leadership of the union movement that the stakes are high enough - and the chances of victory sufficient - to place millions of dollars in labor union money at risk. The AFL-CIO often gives strikers verbal support, but this kind of massive financial backing is rare.

“This struggle is over the basic issues faced by every worker in our economy,” Sweeney said. “It’s about part-time jobs and half-time pay. It’s about increased out-sourcing and decreased retirement security.”

For UPS, the stakes are equally significant. The well-run company, with profits of $1 billion a year and the lion’s share of a booming business, sees its market disappearing, and its loyal customers crippled by the strike.

“There’s been a lot of pain in the strike,” said Lea Soupata, UPS’ senior vice president of human resources. “We care about our people and the pain they are going through and the pain of our customers,” she said.

The promised loss of 15,000 jobs by week’s end is real and not a negotiating ploy, insisted UPS spokeswoman Gina Ellrich. “We see a permanent loss of packages,” she said. “This is not a scare tactic - this is reality.”

The credit-rating agency Standard & Poor’s Corp. said it was maintaining its current triple-A rating on UPS’ debt, but had cut its “rating outlook” for UPS to “negative” from “stable” because of concerns about the strike’s long-term impact.

Because UPS dominates its market, the company “will recapture most business when the strike ends, (but) some permanent diversion of freight volume is possible,” S&P analyst Philip Baggaley wrote in announcing the change. UPS, with revenues of $22.4 billion last year, has about $2.5 billion in long-term debt.

In dueling news conferences Tuesday, the Teamsters and UPS offered dramatically different versions of the key issues in the dispute.

The union talked about part-time workers who, it said, should be given full-time jobs. UPS uses many workers for four-hour shifts between the hours of midnight and 8 a.m. But during busy seasons, some of those part-time loaders and sorters work more than one shift a day.

Part-time workers get approximately $9 a an hour in wages, compared with about $20 an hour for those classified as full-time under the union contract.

At the UPS news conference, the emphasis was on the company proposal for a new pension plan offering big boosts in retirement benefits.

“The Teamsters’ leadership should not stand between their members and a rock-solid retirement,” said Soupata, the UPS official. The UPS plan would offer workers up to $3,500 a month after 35 years of service to the company, as much as $3,000 a month after 30 years and $2,000 to $2,500 after 25 years. It would offer big gains compared with the current system, she said.

For example, retirees under the current central states Teamster plan get $2,500 after 30 years. The new UPS plan would offer them $3,000 a month. UPS and other companies where Teamsters work pay into multi-employer funds, which provide the pensions. UPS wants to withdraw from the funds and set up a new pension plan restricted to UPS workers.

But the Teamsters say this proposal would give the company a chance to divert any surplus in the pension funds for its own corporate purposes.