UPS and the Independent Pilots Association (IPA) reached an innovative tentative agreement today that averts any immediate furlough of our pilots.
Earlier this year, UPS reviewed volume reductions and the need to furlough pilots. IPA’s leadership offered to identify ways to cut operational costs. UPS and the IPA subsequently agreed on cost-cutting targets totaling $131 million over the next three years. Without immediate cost-cutting, we would have had to indefinitely furlough 300 pilots.
Using a variety of voluntary steps, the IPA to date has identified savings totalling approximately $90 million dollars pending final calculations. Although the full three-year goal was not reached by last week’s original June 2 deadline, UPS and the union have agreed there will be no furloughs through April 1, 2010, and that the IPA will continue to work this year to produce additional savings.
Voluntary pilot savings generated later this year could eliminate the proposed layoffs entirely. Based on the Memo of Understanding, the company also has the right to reevaluate the possibility of furloughs if additional flight reductions occur in the future. Should this occur, UPS and the IPA plan to meet again to discuss the mitigation of possible future furloughs.
The savings have been produced through voluntary programs such as pilots taking short- and long-term leaves of absence; military leaves; job sharing; reductions in flight pay guarantees; early retirement, and sick bank contributions. We are confident we can achieve the total savings goal.
This is another example of UPS working with its unions to achieve a mutually beneficial outcome. The agreement will help ensure our company remains strong through this economic downturn and is positioned to emerge even stronger when the economy rebounds.
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