Why Labor Feels It Can't Afford to Lose This Strike



Why Labor Feels It Can't Afford to Lose This Strike

August 17, 1997

The New York Times


Last week, UPS chairman James Kelly warned that the company would have to lay off 15,000 of its 185,000 teamster employees because of business lost from the strike. While teamster officials angrily called that warning an exaggeration and "intimidation," economists say that lost market share, and the accompanying loss of some jobs, is a result of many strikes.

"Every customer whose life has been turned upside down by the UPS strike might think about using a shipper where there won't be strikes," said Paul Schlesinger, a transportation analyst at Donaldson, Lufkin & Jenrette. "If the strike slows the growth of the UPS job machine, it's going to hurt the teamsters."

In addition, the increased wages and the restrictions on part-time jobs sought by the union could make UPS less competitive against Federal Express, DHL Worldwide and other competitors, particularly in the overnight shipping business that UPS has fought so hard to enter, and which is so dependent on part-timers.

Ever since UPs' teamster members walked out Aug. 4, company officials have said that the union's demands would make the company uncompetitive and cost it customers. That suggested an analogy to the high wages of auto workers helping Japanese car manufacturers make huge inroads in the 1970s and 1980s, causing the loss of many auto workers' jobs.

In their defense, teamster officials say their wage demands are modest and should not cause UPS to become uncompetitive, especially since the company's relatively high profit margins give it room to lower prices. In addition, teamster officials contend that their demands to restrict the number of part-time jobs shouldn't make the company less competitive than a prime rival like Federal Express, because while two-fifths of Federal Express workers are part-time, three-fifths of UPS workers are.

Another hope of labor is that a victory would encourage workers at Federal Express and other shippers to think that a union could help them. A big obstacle to organizing Federal Express, however, is its successful lobbying last year to be placed under the Railway Labor Act, instead of the National Labor Relations Act.

Under the railway act, which generally covers airlines and railroads, a union can organize workers only by having representation elections for all of a company's workers at once, instead of conducting separate elections at individual sites. It would be a tall order to organize Federal Express' 110,000 workers all at once.