Part one of a two-part series
As negotiations between UPS and its union mechanics near the midpoint of their fifth year, a veteran mechanic told Insider that the uncertainty is starting to weigh on him.
The negotiations between UPS and the mechanics union, the Teamsters Local 2727, began in October 2013. They affect about 1,300 employees, including about 550 in Louisville, and play a pivotal role in the operations of one of the logistic giant’s North American hubs, where it employs about 21,000.
E-commerce growth and a need for modernization have prompted UPS to invest hundreds of millions of dollars in Louisville in the last few years to increase capacity. The company said in February that it ordered 14 new cargo planes to increase the amount of freight it can handle. The mechanics inspect the planes to make sure that they take off and land safely.
Union leaders and members have told Insider that the major sticking points in negotiations include proposed changes to health benefits for current employees and retirees. The company has said that it pays industry-leading wages and has made generous offers that include options such as premium-free health care.
The negotiations have dragged on because they are governed by the Railway Labor Act, a federal law that makes it more difficult for the parties to initiate a strike or lockout. Any such action has to be approved by the National Mediation Board.
While the union has said that the parties are at an impasse and has voted to strike, the NMB so far has told the parties to return to the negotiating table. Meetings this year have, so far, yielded no results. No additional meetings are scheduled at this point.
Cliff Jones, 37, a Louisville native who has worked with UPS for 18 years told Insider that he likes his job, but that the year-long negotiations and worry about potentially much higher health care costs are weighing on him.
“The issue definitely, it’s been wearing me out,” he said. “That constantly looms over us.”
Jones, an aircraft maintenance technician, earns a base salary of $105,000. He and his wife, Lindsey, a stay-at-home mom, have two girls, Malayna, 7; and Lilliana, 3.
He told Insider that he likes many parts of the job, including being around aircraft, interacting with the flight crew and getting to do something different every day.
The mechanics inspect the planes every time they take off and land, and if they’ve been grounded for an extended period. Inspections can take several hours or even a full shift. The mechanics look at fluid levels, inspect turbine blades and use borescopes to get a view of the engine’s interior. The mechanics note their findings in a log book and then figure out how to fix problems, which may involve calling an engineer for assistance.
It’s complex and physical work: Jones said he frequently crawls through tight compartments on his knees to inspect critical parts of the aircraft, such as the electronics. The work also requires heavy lifting: An aircraft battery, which he has to squeeze into a tight space, weighs 90 pounds.
And the work has to be done in all kinds of weather, including freezing rain and snow.
He has seen fellow union members with back, knee and shoulder problems. Others have suffered hearing loss. And being around kerosene and toxic chemicals increases their cancer risk, he says.
“It’s definitely back-breaking work,” Jones said.
The physical ailments leave some of the mechanics unable to work. A health benefit that bridges the time between early, illness-induced retirement and Medicare, which kicks in at age 65, now costs union members and their dependents $3,700 per year. Union officials have said that they have made concessions over the years to keep that benefit.
Now, they say, UPS wants to increase the members’ annual price for that benefit to an unaffordable $19,401. The company also has proposed changes to health benefits for current workers, the union leaders have said.
“I would hope that UPS would appreciate the sacrifice that I and others have made and give us the contract we deserve,” Jones said.
Workers have received not received raises in five years, he said. Meanwhile, UPS in the last five years has recorded an average annual net profit of $4.1 billion.
“There’s just no reason for any cuts,” Jones said.
Jones was among 919 signatories to a letter the union sent to UPS CEO David Abney last year, asking that the workers be allowed to retain their health benefits because “the demanding work has taken its toll on our bodies.”
UPS spokesman Mike Mangeot told Insider via email that the company “looks forward to reaching an agreement that is good for our mechanics, the company and our stakeholders.
“Our mechanics are good people who do a good job of keeping our air fleet safe and reliable,” he said.
“UPS believes in rewarding our people for their contributions to the success of our company. Because of this, our aircraft mechanics already enjoy the best total compensation package in the industry, and we’re negotiating in good faith to enhance that package.” Mangeot said.
Jones told Insider that his confidence in reaching a deal is waning.
His optimistic side, he said, hopes that the parties can reach a deal, “but the other side of me thinks they’re going to continue to drag their feet.”
UPS remains confident. Mangeot said the company is “ready and willing to return to the table as soon as the NMB deems it advisable.”
Coming tomorrow: How mediators exploit game theory, loss aversion — and time — to get the parties to reach a deal.
Correction: This story was updated to correct how much the workers have received in raises in the last five years.