Mass Layoff: Why the Teamsters Should Have Struck UPS

Last summer, 340,000 Teamsters were ready to strike UPS, but the union settled instead. One could argue it made a mistake. “We’ve changed the game,” the Teamsters announced at the time, because they got some of the life-and-death air-conditioning they demanded in UPS trucks, higher wages, more jobs, part-time rewards, equal pay and a MLK Day holiday among other supposedly “great” wins. But ah, what a difference six months makes. Because at the end of January, UPS announced it would eliminate 12,000 full and part-time managerial jobs to help get $1 billion in cost savings. Why? Because revenue shrank.

UPS hastened to assure the Teamsters that all was well: these luckless workers were not in the union. Though a part-time manager probably doesn’t earn big bucks, getting rid of 12,000 of them helps corporate savings add up. Indeed, given the long-time, anti-union ploy of classifying as many workers as possible as “management,” one wonders how many of these poor part-time managers really should have been in the union. And one also wonders on whom the next round of cuts will fall. Because clearly there will be one, maybe several.

This mass layoff was entirely predictable, bodes poorly for the future for unionized workers, and should have been vigorously addressed and negotiated with more than the sentence on separation of employment: “Upon discharge the Employer shall pay all money due to the employee during the first (1st) payroll department working day,” or that “No bargaining unit employee currently performing work in the payroll department will be laid off or suffer a loss of their current payroll type position as a result of this section.” Another mention of circumstances that might involve a reduction of jobs is “If a technological change creates new work that replaces, enhances or modifies bargaining unit work, bargaining unit employees will perform that new or modified work.” Also “Driver-facing sensors will not be used for any purpose during any phase of a disciplinary process or be the sole basis for disqualifying a driver during the thirty (30) day period.” Regarding employees about to be fired, the contract says they should be kept on until their grievance procedure is finished. It also states that workers who won’t cross a picket line can’t be fired, specifies other instances in which they may not be fired, and those – a positive drug test – in which they may and lays out methods to increase hiring. These are the sorts of job termination and expansion issues that the contract addresses in legalese. They are standard boilerplate and indicate that the union did not specifically address mass job cuts. It probably should have.

But Teamster general president Sean O’Brien was strike-averse and eager to cut a deal. Even critical a/c in the trucks got short shrift, with only one third of UPS vehicles to have it installed over the five-year agreement. What do the drivers in the other two-thirds of the trucks do in sweltering summer heat? Hope they don’t collapse and die of heat prostration, I guess, the way Estaban Chavez, Jr. did in 2022, expiring in his truck from heat stroke. Meanwhile, part-timers continue living out of their cars as they work multiple jobs, because the two-tier wage structure was not ended.

So management got its cake and ate it too. First, with the contract it happily shelled out to snag more flexibility with work schedules. Then, half a year later, unhappy with having paid extra, it fires 12,000 “management” employees. All while UPS ceo Carol Tome pulled down $27 million in 2022. With hindsight, Teamster leadership looks a bit foolish, because rank and file workers were ready to strike and that, not stellar union negotiating skills, is what won employees some of their goals. As Truthout wrote July 26: “Any significant gains won by the Teamsters against a reluctant employer will have come about because rank-and-file workers showed the company they were prepared to strike.”

But worker solidarity was, not to put too fine a point on it, betrayed. “Many of the younger radicals,” Joe Allen wrote in CounterPunch February 1, “that got jobs on some of the most socially isolating shifts at Big Brown, were left confused and in some cases very demoralized by their experience.” These were the activists from Democratic Socialists of America, who had flocked to UPS, getting hired there in expectation of a strike. To make matters worse, O’Brien very publicly hobnobbed with Donald “Tax Cuts for the Rich” Trump at Mar-A-Lago and met with other far-right politicos. Allen blames Teamsters for a Democratic Union for “cleaning up O’Brien’s previous image as a thug, with the broad left media, including Labor Notes, Jacobin and In These Times.”

UPS director of financial and strategy communications, Brian Hughes, was quoted in the Louisville Courier Journal February 2 that this round of layoffs amounts to “less than three percent of the UPS workforce and does not impact union-represented roles.” The ceo, meanwhile, has pointed out that full-time drivers earn $170,000 on average, thanks to the new contract. To repeat, though UPS has not announced which jobs specifically will vanish, company brass was at pains to emphasize that union workers are not affected. Translation: we’re tossing employees into the unemployment line, but we don’t want the union to notice.

And yet, the Courier Journal noted, “UPS reported nearly $2.5 billion in profit for the fourth quarter, according to USA Today. However, the fourth-quarter 2023 consolidated revenues of $24. 9 billion were a 7.8 decrease from fourth quarter revenue numbers in 2022.” Management can’t have that, oh no! Earnings must rise each year, relative to the last, or else UPS will cut jobs to make up the difference. “UPS is shooting for 2024 revenues in the range between approximately $92 and $94.5 billion. However, these numbers would still fall far short of the company’s historic 2022 earnings of $100.3 billion.” As Tome announced back then, “Our results in 2022 demonstrate our strategy is working.” So I guess one must conclude that if UPS doesn’t repeat its 2022 high this year, and it probably won’t, more layoffs will come next year. Fun times.

In fact, future lay-offs are a near certainly, as UPS struggles to match its 2022 revenue bonanza. One wonders about union negotiations with regard to job security, because that, as these latest firings show, is a big issue at UPS, a company that ditches thousands of workers because its revenue fell short of $100 billion. True, the contract won “the creation of 75,000 new full-time Teamster jobs at UPS and the fulfillment of 22,500 open positions,” according to the Teamster’s press release on the contract, but nothing specifically appears to address protections against job cuts. This is always a dicey contract demand, because management doesn’t want to lose its grip on the absolute power to fire, but if these 12,000 lay-offs are an omen, maybe the Teamsters should have addressed it.

In these times, with companies more focused than ever on investor profits, stock buybacks, top brass compensation and stock dividends, it is wise for unions to be proactive about job security. Even if it means going out on strike. After all, strikes work. Why else did the railroad industry turn to president Joe “Phony Lunch Bucket” Biden to break a trainman strike, the focus of which for workers was job conditions? Precarity is a job condition, like overwork or being on call multiple days in a row. It is arguably the condition that enables all other on-the-job abuses. Remember, Biden was only too happy to sweep all workplace condition demands off the table for railroad employees. But he couldn’t do so for UPS, because there’s no federal involvement in the company. Turns out he didn’t need to, because the union decided not to press the issue.

Unions ignore precarity and working conditions at their peril. Teamsters head O’Brien’s laser focus on pay to the exclusion, say, of getting a/c in ALL the trucks speaks volumes about union leadership’s lack of touch with day-to-day labor. If O’Brien had to drive an un-air-conditioned vehicle for days on end in 100-plus degree weather, air-conditioning would have been a non-negotiable demand. If he lived in terror of losing his job, like some unfortunate part-time “manager,” you can bet precarity would have been an issue too. A genuinely good contract would have addressed these matters.

Meanwhile, over at the United Auto Workers, leader Shawn Fain led a successful strike and guess what? Contrary to management predictions, the sky didn’t fall in – even though one worker demand was the right to strike over plant closures and one key achievement was saving jobs at a factory in Belvedere, Illinois, previously slated for closure. This is a worthy union goal, and the UAW proved it attainable. Maybe next time, after who knows how many rounds of layoffs, the Teamsters will pursue it, too.

Eve Ottenberg is a novelist and journalist. Her latest book is Lizard People. She can be reached at her website.