[WSJ] Reality Bites UPS and the Teamsters: The company is laying off workers after its big contract

there doesn't seem to be any kind of overall organized labor and/or labor union thread here, apologies if I just couldn't find it

https://www.wsj.com/opinion/ups-lay...c?st=YzhmfA&reflink=desktopwebshare_permalink

Reality Bites UPS and the Teamsters
The company is laying off workers after its big contract payoff to the union.
By The Editorial Board
Jan. 31, 2025 at 5:38 pm ET

Two years ago Teamsters boss Sean O’Brien touted a “historic” labor agreement with United Parcel Service. Now comes the rest of the story, and it isn’t pretty. UPS shares plunged Thursday 14.1% after it announced workforce and delivery reductions. Workers who lose their jobs can thank Mr. O’Brien.

Recent earnings reports have been mostly upbeat with many companies announcing new investments. Not UPS. The carrier on Thursday announced a “network reconfiguration” that “could result in the closure of up to 10% of our buildings, a reduction in the size of our vehicle and aircraft fleets, and a decrease in the size of our workforce.”

It will also cut half of its delivery business with Amazon, its largest customer. UPS’s rising labor costs have made many Amazon deliveries less lucrative and perhaps unprofitable. Amazon will now use its own network to deliver more of its own packages, which it can do at lower cost than UPS because most of its drivers aren’t unionized.

The Teamsters have found little success trying to organize Amazon workers, so it’s ironic that their labor contract with UPS is making the retail giant bigger. The 2023 UPS agreement increased average compensation for full-time drivers over five years to $170,000 from $145,000. Teamsters at UPS get up to seven weeks of vacation and don’t pay healthcare premiums.

“Teamsters have set a new standard and raised the bar for pay, benefits, and working conditions in the package delivery industry,” Mr. O’Brien declared. “This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention.” No doubt they are.

UPS’s travails are a warning to other companies and workers. Last January UPS said it would cut 12,000 jobs, mostly in management, owing to falling package volumes and rising labor costs from its Teamsters agreement. A couple months later UPS said it would close some 200 sorting centers, which spurred thousands of layoffs.

Last month UPS said it plans to dismiss 404 workers in Commerce City, Colo., to automate a processing facility and 304 in Oklahoma City as part of another facility “modernizing.” Congratulations to Mr. O’Brien for pricing his members out of jobs. When labor costs rise above what the market will bear, it becomes more efficient to employ robots—who won’t go on strike.

Meanwhile, the Teamsters chief has been threatening a strike at Costco stores on the West and East Coasts if the retailer doesn’t agree to an “industry-leading contract” by midnight Friday. Mr. O’Brien has a long record of making labor demands that boomerang on workers.

When floundering trucking firm Yellow Corp. sought financial concessions from its Teamsters in 2023, Mr. O’Brien refused and tweeted the image of a gravestone in a cemetery with “Yellow” on it. Yellow filed for bankruptcy, costing some 22,000 Teamsters their jobs.

Senators might take notice of the Teamsters’ trail of worker tears. President Trump nominated Lori Chavez-DeRemer, the daughter of a Teamster who has endorsed the pro-union Pro Act, as his Labor secretary in return for Mr. O’Brien’s favor of not endorsing him. Surrendering to union bosses will hurt American workers and businesses. UPS, Q.E.D.
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