Teamsters boss vows tougher line in US labour talks

US employers should expect a tougher fight in labour negotiations, the head of one of the country’s largest unions has warned, as he prepares for a contract dispute that could result in the most disruptive strike in decades.

“We’re taking a militant approach,” Teamsters president Sean O’Brien told the Financial Times during an interview, saying that members were now less willing to compromise with employers and more willing to strike. “[We say] this is what we want, this is what our members need, this is what they deserve. And then they’re gonna give it to us. And we fight if we have to.”

O’Brien’s comments come as the Teamsters renegotiate the largest private sector union contract in the country, between delivery service UPS and its 340,000 US-based drivers and package handlers. The union is demanding universal pay rises, the end of the existing two-tier pay system, and the installation of air conditioning into trucks, among other things.

He has repeatedly pledged that the Teamsters will strike if they do not reach an agreement with UPS after their contract expires on July 31. O’Brien touted a $300mn strike and defence fund that would allow the union to replace striking members’ pay cheques and healthcare benefits. Union members are voting this week on whether or not to authorise O’Brien to call a strike.

Business leaders have urged the two sides to reach a compromise, warning that a strike would affect consumers and businesses across the US economy. According to the Pitney Bowes shipping index, UPS delivered one in four of the 58mn parcels shipped in the US each day last year, more than FedEx or Amazon and second only to the US Postal Service.

Competitors have echoed that concern, with Mike Parra, chief executive of DHL’s Americas business, saying that other parcel delivery services would not be able to pick up the slack.

The Teamsters’ last strike in 1997 “cost UPS a lot of money, but it destroyed all of us around,” Parra said: “Everybody’s network got overwhelmed . . . so I hope it doesn’t happen.”

UPS has expressed optimism that it can agree a deal, while putting contingency plans in place for any stoppage. It admits that some customers have already “diverted” work elsewhere.

“While we expect to hear a great deal of noise during the negotiation, I remain confident that a win-win-win contract is very achievable,” UPS chief executive Carol Tomé told analysts in April.

Deutsche Bank analysts said last month that they thought a strike was unlikely, citing the “significant” benefits already enjoyed by UPS’s Teamsters, the “narrow” gap between the two sides’ positions, and the union’s limited funds for compensating striking workers.

Even so, the analysts noted that “rhetoric has heated up” over the dispute. O’Brien has from the beginning signalled his unwillingness to compromise, cutting the time allotted for talks from the standard one year to just 12 weeks.

“The longer this contract negotiation goes on, the longer Wall Street is going to be affected,” O’Brien said. “And that’s OK, just as long as Main Street gets taken care of at the end of the day.”

Large-scale strikes of blue-collar workers were once common in the US, before Ronald Reagan fired more than 11,000 striking air traffic controllers in 1981. The event emboldened employers to fire their own striking workers, thus weakening the unions’ biggest weapon.

The number of big US strikes, involving 1,000 workers or more, fell from 187 to 16 between 1980 and 2021, while union membership has roughly halved to a record low of 10.1 per cent in 2022, according to labour department data.

Interest in unions surged early in the coronavirus pandemic with high-profile campaigns at Starbucks, Amazon and Apple. But those new unions have struggled to secure the employment contracts necessary to create gains for workers, and the formation of bargaining units has slowed.

O’Brien said that winning higher wages and improvements to working conditions was the best way to retain existing union members and attract new ones. The Teamsters have also launched a campaign to organise workers at Amazon and are actively renegotiating contracts with shipper Yellow Corp and the American Red Cross.

The Teamsters elected O’Brien as president in November 2021, following a tumultuous few years for the union. UPS workers, who comprise its largest group of members from any one company, have been angry with previous leadership for using a loophole in the union’s constitution to force through an employment contract in 2019 that 54 per cent of members had voted down.

Workers also said that an influx of packages since the start of the Covid crisis had made their jobs untenable.

O’Brien, a fourth-generation Teamster and longtime leader of its Boston local, had been an outspoken critic of then-president James Hoffa, the son of Jimmy Hoffa, the late legendary Teamsters boss. He campaigned against a Hoffa-endorsed candidate on a promise to be more “assertive” with employers.

O’Brien’s election was only the second time that an incumbent or someone endorsed by one did not win a nationwide Teamsters election in the union’s 120-year history, according to David Witwer, a professor at Pennsylvania State University who studies the Teamsters.

“[James Hoffa] took the path of least resistance,” O’Brien said. “The one thing that our administration has been focused on is not conceding.”

There is some evidence that other large unions are following O’Brien’s lead.

The number of strikes involving at least 1,000 workers rose nearly 50 per cent to 23 in 2022, according to labour department data. It was the highest number of big strikes in two decades.

United Auto Workers, the 391,000 member union that represents workers at General Motors, Stellantis and Ford, elected a new president in March who has also pledged to be tougher on employers. At a union-wide town hall meeting with members on Friday, Shawn Fain said he “will not accept any concessions” in their contract negotiations later this year.

“They can afford our demands, and we expect them to pony up,” Fain said.

Asked if he expected a strike at UPS, O’Brien said he did not know, but he remained confident that UPS would eventually acquiesce to the Teamsters’ demands.

“I don’t think they have a choice,” he said.

Additional reporting by Andrew Edgecliffe-Johnson