What happened
A crippling potential labor strike looming over United Parcel Service (UPS 0.14%) has been avoided. That's positive news for the company and the millions of Americans who receive packages delivered by the logistics specialist. It isn't, however, being taken well by UPS' investors.
On Tuesday, following news of a tentative agreement on a new contract being negotiated by the company and the Teamsters union backing its workers, those investors traded UPS stock down by nearly 2%. That was a steeper fall than the 0.3% decline of the S&P 500 index.
So what
Both UPS and the Teamsters announced the news on Tuesday, with unsurprisingly different takes on it.
In a tersely worded press release posted on its site, the transportation and logistics giant quoted CEO Carol Tome saying of the tentative, five-year deal that it "continues to reward UPS's full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong."
The Teamsters sounded a more triumphant note, saying that it managed to secure "the most historical tentative agreement for workers" in the company's long history. It described the deal as "overwhelmingly lucrative" for the 330,000 or so affected workers. The union's national negotiating committee unanimously endorsed the arrangement, it added.
Now what
In its press release on the tentative agreement, the Teamsters said it includes such measures as a $2.75 per hour bump in pay this year for both part- and full-time UPS workers. This rate is $7.50 in total over the length of the contract.
Meanwhile, new part-time hires at the company will start at a pay rate of $21 per hour, which can be increased to $23. Other points of the agreement cover issues such as overtime work and holidays.
The deal must still be ratified by UPS Teamster members. They are scheduled to start voting on it next Thursday, Aug. 3. The poll concludes on Tuesday, Aug. 22.
