United Parcel Service, Inc. Labor Battle Heats Up: Is Worldport at Risk for a Strike?

Editors note: This article previously stated the Local 89 air rider contract had been voted down twice and the most recent vote would be the third vote. This was incorrect and Local 89 is voting for the second time on the air rider contract, not the third. Consequently, Local 89 will not be allowed to petition to strike unless this vote is rejected and they reject the next revised contract. The Motley Fool apologizes for and regrets this error. 

UPS  (NYSE: UPS  )  ratified its new master labor contract last June, but the company has yet to be able to implement this contract because several local unions have voted against their individual supplement and rider contracts. This story hasn't garnered much attention from the financial media outlets or during UPS earnings releases. For example, in the fourth-quarter conference call UPS management mentioned this very important detail exactly zero times. Don't let the lack of attention fool you, though -- this issue is one UPS investors should pay very close attention to.

The company's unionized workforce is broken down into different voting districts, and those districts vote on the master contract, and certain locales also vote on riders and supplements that need to be approved before the master contract can go into effect. The company has yet to come to an agreement with its Philadelphia, western Pennsylvania, and Louisville locales, but of the three, Louisville is the most crucial to the company.

Louisville, known as UPS's Worldport, serves as the main distribution hub for all of the company's air package delivery. The facility is immensely important to UPS's business, but Local 89, the union in Louisville, has already voted down its local air rider contract once before. The union has now voted a second time, and the votes are to be tallied by April 10. If the contract is voted down, which Local 89 has recommended its members to do, the union and UPS will then have one more chance to come to an agreement and a third vote will be taken. If the contract is not agreed upon after the third vote, then Local 89 has the option to petition for a strike.

In this video, Motley Fool industrial analyst Blake Bos takes a close look at labor relations at UPS. He gives investors key information for what to watch for as this story unfolds, and discusses just how big of an impact a strike in Louisville would have on the company.

Boost your 2014 returns with The Motley Fool's top stock
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 08, 2014, at 9:56 PM, kthor wrote:

    actually happy with USPS this days ... have done a much better job with deliveries

  • Report this Comment On April 09, 2014, at 9:46 AM, Paganpink wrote:

    Why do you say they are a company with poor labor relations? I know of no major Teamster employer that has had FEWER strikes and problems then UPS. You appear to be punishing them for being a union company at all. And they are the last union small package delivery company left in this country. By definition they must have had better labor relations then the rest that failed, right? They are also the only teamster employer that hasn't asked to reduce pay or benefits over the last 70 years!

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2907695, ~/Articles/ArticleHandler.aspx, 11/27/2014 2:14:56 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement