UPS shares nudge higher after reaching crucial labor pact with Teamsters
UPS and the Teamsters have agreed a five-year labor deal that will pay some veteran drivers as much as $175,000 a year.
United Parcel Service (UPS) - Get Free Report shares edge higher in pre-market trading after its unionized workers voted to ratify a new five-year, $30 billion labor contract with the world's biggest package delivery group.
The International Brotherhood of Teamsters union, which represents around 340,000 UPS employees, said workers voted 86% in favor of the new deal, although a a small local affiliate in Florida, with a 174 members, will still need to ballot in order to fully confirm the agreement.
Part-time workers will earn $21 an hour under terms of the new agreement, a 35.5% increase from prior levels, while certain drivers will earn as much as $49 per share, with maximum wages of $175,000 per year, by the end of the five-year term.
“This contract will improve the lives of hundreds of thousands of workers,” Teamsters President Sean O’Brien said in the statement. “Teamsters have set a new standard and raised the bar for pay, benefits, and working conditions in the package delivery industry.”
UPS shares were marked 0.4% higher in pre-market trading to indicate an opening bell price of $167.55 each.
Higher labor costs, as well as the loss of customers to rival FedEx FDX during UPS's labor negotiations with the Teamsters, led to the group cutting its full-year profit forecast earlier this month.
UPS now sees revenues in the region of $93 billion, down from its prior estimate of $97 billion, with operating margins narrowing to around 11.8%.
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