2023-06-29 08:45:31 ET
The tension continues to rise between United Parcel Service ( NYSE: UPS ) and the union representing roughly 340K U.S. drivers, package handlers and loaders. The International Brotherhood of Teamsters said in a statement issued late on Wednesday that it walked away from the national bargaining table and officially demanded UPS ( UPS ) exchange its last, best, and final offer no later than June 30.
The Teamsters said the shipping giant's latest proposal included "miniscule raises and wage cuts to traditional cost-of-living adjustments." The union said it reached consensus on 55 non-economic issues with the company on June 19, but UPS has continued to seek a cost-neutral contract during the economic negotiations. Meanwhile, UPS ( UPS ) stated that it remains at the table, ready to negotiate.
The background is that UPS and the International Brotherhood of Teamsters are negotiating a national contract ahead of a July 31 deadline when the current agreement expires. So far, deals with the union have been worked out for most of the outstanding supplemental agreements, which govern local issues. However, the master agreement covering the 340K workers still needs to be worked out. Notably, the UPS labor deal will be the largest private sector collective bargaining agreement in the U.S. and the deal talks involve the direct participation of Teamsters President Sean O’Brien.
Deutsche Bank recently reiterated a Buy rating on UPS ( UPS ) ahead of the potential labor turmoil. Analyst Amit Mehrotra factored in the Teamster's strike fund and strike pay benefits, wage structures, and costs associated with potential driver classification changes. "While the rhetoric has heated up, and we expect a strike authorization vote in the next few weeks, we feel comfortable that a strike will not occur," he noted.
Shares of UPS ( UPS ) rose 0.25% in premarket trading to $176.10. Over the last six weeks, UPS ( UPS ) has gained 3.15% despite the union overhang.
More on UPS:
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- UPS: Near-Term Headwinds Keep Me On Sidelines
- More articles from Seeking Alpha analysts
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UPS strike is called imminent by Teamsters as negotiations stall