12 of this, a dozen of that....

Discussion in 'UPS Discussions' started by dannyboy, Jan 26, 2010.

  1. dannyboy

    dannyboy From the promised LAND

    first off, I hate it when any ups employee loses their job, management or hourly. it sucks. but in todays world, with todays values in our company, even the sacred cows need to be evaluated when it comes to company survival.

    take a center, much like ours, with twin center managers, and around 100 drivers. word comes down that we need to cut costs, so they need to cut 4 drivers.

    cut the driver, and he gets to replace the bottom two people part time, so the bottom 8 part timers get the ax.

    a typical driver working a 9.5 makes aprox 75,000 a year, plus another 13,000 in benefits, retirement and insurance

    part timer makes 9500 a year, no other costs for benefits, as he is at the bottom

    the 8 part timers make a combined 78,500 a year, and they are now replaced doing the same job, by 4 drivers that are pulling down a bit over 71,000 each or 284,000 with benefits.

    the cut routes add an additional 190 hours of work that is then spread to the other drivers. now, assuming that 25 hours of that is drive time that is no longer spread to the 4 drivers, that still leaves 165 hours a week, all of which is overtime, or an additional cost of 360,000 dollars to the center’s cost.

    so these cuts have the following results for the center

    savings to the preload for 8 lost employees 78,500
    cost to the preload for using drivers instead 284,000

    savings to the delivery costs 352,000
    extra costs in overtime 360,000

    so the net result in delivery is almost a wash cost wise, as it only costs about 8,000 in labor costs to cut those routes, a difference that is very easily made up by fuel and vehicle costs savings by cutting those four drivers.

    where the real extra costs come is when you take the drivers out of delivery, and put them into the preload.

    over all, cutting those 4 drivers makes sense, because by the time you factor in all the additional overhead, ups comes out ahead financially, quite possibly several hundred to thousands dollars a week in actual savings.

    for many many years, that was the first and only line of cost reductions in labor costs.

    now, it seems, the shoe is on the other foot

    with the micro management at the very top, and virtually no command decisions made at the center level without district approval, management cuts were a sure thing to be next.

    center manager makes 80,000+ in wages, mip, and insurance benefits, so basically, well above 100,000.

    district people you can figure 120,000 or better a year wages and benefits.

    when one of our center managers is gone, there are a few things that get postponed or canceled. everything else is handled by other members of the staff. heck, outside of dealing with some labor issues, there is no change to operations when they are both gone.

    there is no, or very little increase in costs, because all the staff is salaried.

    so if we dump one of the center managers, we save upwards of 2000 a week plus. we can even increase the other center managers wage for all that extra "work" he is doing.

    with all the cost cutting initiatives of the past, why are they just now getting around to figuring this one out?

    they have cut as much of the hourly workforce as they legally can under the contract. the only way to achieve additional costs savings is to trim the management load. no longer is the management positions beyond the reach of the ax, actually, they are the only positions left to cut, so to please the stockholders.

  2. Old Shoes

    Old Shoes New Member

    What about how they are putting the pressure on some of the older guys to retire. They ride them and harrass them until they retire. Plus in our center they are crying the blues that it is so bad the volume is down so they need to cut rtes. Then all they do is load all the other rtes up with work. And on top of that they raised the average stop count per car. As a driver I can say we are working as effciently as possible. They are grasping at straws to cut cost.
  3. bumped

    bumped Well-Known Member

    dannyboy, for the most part, most if not all the full time drivers that are bumping into the preload have not reached top rate. I'm guessing the laid off drivers are making around $18/ hour. That is the way it is in my center.
  4. govols019

    govols019 You smell that?

    We don't have any drivers in our center that are not at top rate. All centers are different.
  5. JustTired

    JustTired free at last.......

    Maybe this is why there's a push on write-ups. If they can eliminate 4 drivers instead of them bumping PTers, that extra cost is not a concern.
  6. dannyboy

    dannyboy From the promised LAND

    and the suspension that follows.

    as long as the union does not let this activity slide, and fights it for what it actually is.

    there are ways to fight what is happening.

  7. 705red

    705red Browncafe Steward

    Danny you forgot to mention the labor costs involved in all the 9.5 grievances not to mention the triple time for all those hours worked.
  8. dannyboy

    dannyboy From the promised LAND

    red, its still cheaper to work them over 9.5.

    several reasons. the company makes the 9.5 grievance process so hard in most places, usually with the aid of the union, that most drivers wont file. seen it in several places, was that way here for a while even.

    but even with the triple time, it is still cheaper to work the driver longer hours, than to cut a run in with an extra driver.

    but cutting a center manager when you have two or three in a center (we did have three), is only a prudent move by ups.

    eventually, the only reason for management at a center level will be disapline. that can be handled by a part time sup.

    even area training will be handled on the district level.

    of course they will never get rid of the part time sups, as they would have to hire 7.9 part time hourly for each 10 part time sups they lay off. and those part time sups will deliver the packages that the full time sups would have as well.

  9. sosocal

    sosocal Member

    another reason cheaper with overtime - pension payouts are only tacked onto the first 40 hours and stop. The overtime after the pension load could be cheaper than adding another pension load - In fact I hear a driver is actually cheaper on the overtime after 40 hours than including the pension contribution for the first 40 hrs.
  10. dannyboy

    dannyboy From the promised LAND

    unions over the last 50 years have brought around some really good changes in the way companies treat employees.

    and there are some unintended consiqueses at times. and this was one. ever think that is one of the reasons the dot stepped in to restrict the hours of service while driving?

    as a delivery driver, i really didnt mind 10-11 hour days, as long as we started early enough. problem is over the years, the start time has been rolled back so many times, and is now pretty much 9am. so that pretty much limits any family time after work to watching the news and the late show. pretty much forget about doing or seeing anything with the kids.