[PEN-L:11736] UPS losing $30-50 million/day

[Michael Eisenscher <meisenscher@xxxxxxxxxxx>]

          August 13, 1997


          Unions Plan Loan to Teamsters; U.P.S. Warns of Layoffs


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          Additional Coverage of the U.P.S. Strike

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          Ron Carey, Teamsters President
          Gina Ellrich, U.P.S. spokeswoman
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          By STEVEN GREENHOUSE

               atcheting up the stakes in the United Parcel Service strike,
John Sweeney, the AFL-CIO's
               president, announced Tuesday that the nation's labor unions
would lend the International
          Brotherhood of Teamsters $10 million a week for "many, many weeks"
to sustain members during
          the strike.

          Officials with the AFL-CIO said the unions had never before lined
up so much financial support for
          a strike, demonstrating that labor leaders view the walkout as a
pivotal showdown for the
          increasingly assertive labor movement that hopes to show that it
cannot be pushed around by
          management.

          "Because their fight is our fight, we are making this strike our
strike," said Sweeney at a news
          conference at the headquarters of the International Brotherhood of
Teamsters in Washington.
          "Before the week is out we will have enough loan commitments from
other unions, large and small,
          to finance the worker side of this confrontation for a long
strike, if that's what it takes -- many,
          many weeks at $10 million dollars a week."

          Ron Carey, president of the Teamsters, welcomed the financial aid
as an unusually generous show
          of solidarity. The loans will be used to finance strike benefits
of $55 a week for each member and
          public relations efforts by the Teamsters to help strikers endure
a long walkout.

          The strike fund went broke in 1994 and benefits were eliminated.
Last year when Carey balanced
          the union's budget, he set the benefit at $55 a week. But the
union will have to dip into its general
          fund to begin paying benefits at the end of this week.

          The unprecedented size of the financial assistance announced
Tuesday, labor leaders say, stems
          from the sheer number of workers on strike against UPS and the
symbolic importance of the issues
          involved: pensions and part-time work. In addition, this strike is
by far the biggest test that
          Sweeney's labor movement has faced since he took the AFL-CIO's
helm 22 months ago, pledging
          to revive the movement.

          While Sweeney sought to give the strikers the wherewithal for a
long strike, James Kelly, United
          Parcel's chairman, issued a layoff warning that union officials
said was designed to push the strikers
          to return to work.

          He said that if the strike, now in its 10th day, lasts two weeks,
the drop in business will cause
          layoffs of 15,000 unionized workers -- and possibly many more if
the strike lasts a month or more.

          "The longer it goes on, the fewer jobs we'll have, so this is
about destroying jobs at UPS," Kelly
          said on NBC's program "Today."

          Carey said the talk of layoffs was "intimidation," and he
questioned whether the company had lost
          enough business to make layoffs necessary.

          Kelly once again called on President Clinton to seek an injunction
ordering the Teamsters back to
          work under the Taft-Hartley Act, which gives the president such
powers when a strike is deemed
          to have done serious damage to the nation's security or economy.

          "We have customers who are closing down shifts," Kelly said. "We
have customers who are laying
          off people. We have customers who have their business stacked up,
and they tell me they can't
          hold out much longer."

          The Teamsters and their labor allies vigorously oppose an
injunction, asserting that the strike has
          not caused severe economic damage. Union leaders say they fear
they will lose bargaining leverage
          if the strikers are forced back to work.

          At the news conference Tuesday, Sweeney said, "President Clinton
needs to let UPS know
          definitively that he will not be providing an escape hatch for UPS
negotiators. Once it is made clear
          to these giants of private enterprise that they can't count on
rescue by the government, they will
          bargain in good faith and the strike will soon be over."

          United Parcel was feeling financial pressure from the strike.
Investment analysts estimated that it
          was losing between $30 million and $50 million a day because it
had many fixed costs and also had
          to pay the salaries of the 100,000 managers, accountants, clerks
and nonunion employees who
          have continued working.

          "They're into the several hundred millions of dollars of losses
and the meter is still running," said
          Philip Baggaley, an analyst at Standard & Poor's. "UPS can
withstand a strike quite well in terms of
          financial resources -- it has a $4.5 billion bank line and a fair
amount of cash. The risk is the
          longer-term damage from customers choosing to use other
transporters instead of relying
          exclusively on UPS."

          The two sides have orchestrated huge efforts in recent days to win
public support. United Parcel,
          the world's largest package-delivery company, ran full-page
advertisements Tuesday in more than a
          dozen newspapers, saying that it had made a generous offer to the
union and apologizing for any
          difficulties caused by the strike.

          For their part, strikers have visited hundreds of the company's
customers to explain their cause and
          have given out thousands of pro-union flyers at football and
baseball stadiums across the country.

          Talks broke down again last Saturday after the two sides failed to
reach agreement about wages,
          pensions and the company's widespread use of part-time workers.

          Tuesday, the two sides seemed far more interested in playing
hardball, than in returning to the
          bargaining table.

          Discussing the strike, Sweeney said, "It's about a greedy, hugely
profitable employer who wants to
          make even more money by shortchanging workers on their wages and
benefits."

          Labor Secretary Alexis Herman briefed Clinton on Tuesday on the
situation, after having met with
          negotiators from each side on Monday. Even though no talks are
scheduled, she sounded a note of
          optimism.

          "I'm encouraged in that I believe that both sides expressed a
willingness to be more flexible in
          looking at their own differences," she told reporters while
accompanying Clinton on a trip to St.
          Louis.

          Mike McCurry, the White House spokesman, said Ms. Herman would
have another round of
          "contacts" with the two sides on Wednesday in hopes of persuading
them to resume negotiations.

          Administration officials say they are closely monitoring the
strike, which involves more workers than
          any other walkout this decade. In addition, UPS normally handles
12 million parcels a day --
          almost 80 percent of the parcels shipped by ground nationwide --
but the strike has pushed its
          volume below 10 percent of that.

          Speaking privately, some union leaders voiced fears that United
Parcel would seek to press the
          Teamsters to the wall because its strike fund was close to zero.
It ran out in 1994 during a 24-day
          freight strike by 70,000 drivers. The fund was already low because
the union had voted in 1991 to
          raise strike benefits to $200 a week but refused to increase dues.

          "The strike won't be decided by the strike funds," said Carey.
"This is a strike about the future --
          about good jobs, about our children, our grandchildren."

          Explaining why several unions had agreed to make loans to the
Teamsters strike fund, Denise
          Mitchell, the AFL-CIO's communications director, said, "Unions
generally understand that this is a
          strike that affects all workers. They all have a strong stake in
making sure that workers don't get
          undermined in this economy. There is huge support for this strike."

          Labor leaders said unions have a long history of providing
financial aid to strikers at other unions,
          pointing to lengthy strikes at Caterpillar Inc. and A.E. Staley.