{"id":24145,"date":"2023-06-18T02:38:32","date_gmt":"2023-06-18T06:38:32","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/ups-workers-could-strike-this-summer-what-to-know\/"},"modified":"2023-06-18T02:38:33","modified_gmt":"2023-06-18T06:38:33","slug":"ups-workers-could-strike-this-summer-what-to-know","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=24145","title":{"rendered":"UPS Workers Could Strike This Summer. What to Know."},"content":{"rendered":"
\n
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United Parcel Service\u2019s largest labor union is ready to play hardball. <\/p>\n

On Friday, the International Brotherhood of Teamsters union said that members had overwhelmingly voted to go on strike if a collective bargaining agreement with
\n UPS
\n (ticker: UPS) isn\u2019t reached by the expiration of their current deal. A new contract will likely add to UPS\u2019 costs, which have been under scrutiny from investors lately.<\/p>\n

\n

UPS and the Teamsters have been negotiating a new collective bargaining agreement since April. More than 70% of UPS employees in the U.S. belong to labor unions, including some 340,000 Teamsters. Pilots, mechanics, and other workers belong to separate unions with their own contracts, as do UPS employees abroad. The company has more than 500,000 total employees.<\/p>\n

\u201cIf this multibillion-dollar corporation fails to deliver on the contract that our hardworking members deserve, UPS will be striking itself,\u201d Teamsters general president Sean M. O\u2019Brien said in a statement. \u201cThe strongest leverage our members have is their labor and they are prepared to withhold it to ensure UPS acts accordingly.\u201d<\/p>\n

On Friday, the Teamsters union said that 97% of members had voted to authorize a strike if a deal with UPS isn\u2019t reached by the expiration of the current contract on July 31. That puts a potential labor stoppage around six weeks away\u2014but there\u2019s still plenty of time for the two sides to reach a deal.<\/p>\n

\u201cThe results do not mean that a strike is imminent and do not impact our current business operations in any way,\u201d UPS said in a statement. \u201cWe continue to make progress on key issues and remain confident that we will reach an agreement that provides wins for our employees, the Teamsters, our company, and our customers.\u201d<\/p>\n

Investors have been focused on UPS\u2019 expenses this year. Consumer spending on goods\u2014and online shopping in particular\u2014took off during the Covid-19 pandemic, benefitting UPS and
\n FedEx
\n (FDX), but so did the companies\u2019 costs related to fuel and labor. That was fine as long as demand was soaring, but with a potentially slowing economy and retail sales in 2023, there\u2019s more concern this year about UPS\u2019 ability to pass along expenses\u2014and keep profit margins intact.<\/p>\n

Wall Street expects UPS\u2019 revenue to be down 3.6% in 2023, to about $97 billion, and for operating earnings to be down 12%, to $12 billion. That\u2019s about a 1.5 percentage point contraction in the company\u2019s operating profit margin.<\/p>\n

Teamsters members received a 6.1% average wage increase in August 2022 under their previous contract with UPS. Citi analyst Christian Wetherbee estimates that total wages and benefits paid to Teamsters-represented employees represents about $30 billion in annual spending for UPS.\u00a0<\/p>\n

Another roughly 5% increase would shave roughly 25 cents from UPS\u2019 annual earnings per share, per Wetherbee\u2019s math. That\u2019s about 2.3% of the $10.72 per share on average that Wall Street analysts expect the company to bring in this year, or 2.1% of next year\u2019s $11.78 consensus forecast. The new contract would kick in on August 1, so the impact could start to be felt in the third quarter.<\/p>\n

UPS stock has returned 4.6% including dividends so far this year, versus a 36% gain for rival FedEx. The
\n S&P 500
\n has returned 15% in 2023, while the
\n Dow Jones Transportation Average
\n has returned 11%.<\/p>\n

Write to Nicholas Jasinski at nicholas.jasinski@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

United Parcel Service\u2019s largest labor union is ready to play hardball. On Friday, the International Brotherhood of Teamsters union said that members had overwhelmingly voted to go on strike if a collective bargaining agreement with UPS (ticker: UPS) isn\u2019t reached by the expiration of their current deal. A new contract will likely add to UPS\u2019 […]<\/p>\n","protected":false},"author":1,"featured_media":24146,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-24145","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nUPS Workers Could Strike This Summer. What to Know. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"United Parcel Service\u2019s largest labor union is ready to play hardball. 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