UPS buys Overnite

In early May, United Parcel Service (UPS) announced that it was buying Overnite Transport for $1.25 billion. Wall Street and the business press greeted this announcement with great applause and soaring stock prices.

UPS, known to most people by its familiar brown trucks and "What can Brown do for you?" commercials, is already the world’s largest parcel delivery company. It is one of the largest private sector unionized employers in the United States, with the Teamsters representing nearly 215,000 of its workers, making it the largest Teamster employer in the United States. The Teamsters have lost nearly a million members since the late 1970s.

UPS’s purchase of the non-union Overnite will allow it not only to become a major player in the traditional freight industry, but it will also significantly weaken the hold of the Teamsters over its workforce. Overnite has more than 10,000 drivers and dockworkers, and is the largest non-union freight company in the United States. One cannot help but think that part of the motivation for UPS’s purchase of Overnite is not simply that it is non-union, but also that Overnite easily defeated the Teamsters in a three-year strike that officially lasted from October 1999 to October 2002, but was in many ways stillborn.

What has been the response of the Teamsters to this dire threat to one of its last bastions of strength? A statement released by the Teamster’s Parcel Division Director Ken Hall said, "We have been assured that this purchase will not affect bargaining unit work." Teamster General President James P. Hoffa, Jr., son of the notoriously corrupt and mob-murdered Teamster leader James R. Hoffa, declared, "We are hopeful that UPS’s long history as a company with Teamster representation will create new opportunities for Overnite workers to achieve their goals in the workplace."

Assured? Hopeful? One would not know from the statements of Hoffa and Hall that they are dealing with one of the most right-wing, vicious, and powerful corporations in the country that has long been committed to busting the Teamsters. Twenty years ago, UPS pioneered the development of a low-wage, part-time workforce that has become the norm in large parts of the U.S. economy. Today, something like two-thirds of UPS Teamsters are part-time.

It wasn’t that long ago, in 1997, that reform General President Ron Carey was forced to call a nationwide strike against UPS in response to the company’s refusal to create new full-time jobs, its attempt at stealing the pension fund, and to push its workers into HMOs. The strike turned into a great victory for Carey and the UPS Teamsters. Picket lines were solid across the country, as the strike became a crusade against low wages and part-time work. "Part-time America won’t work" became the slogan of the strike, and polls revealed two-to-one support for the Teamsters. Three weeks into the strike, UPS threw in the towel and conceded to the union’s main demands. It was the biggest victory by the labor movement in thirty years. UPS’s humiliation, however, quickly turned into fury against Carey and other reformers in the Teamsters whom they blamed for their very public defeat.

An arrogant company, long used to getting its way and dealing with a corrupt and compliant union leadership, UPS committed itself to destroying Carey and voiding the union’s victory. It got help from conservative Teamster officers, known as the "old guard," who opposed Carey and his efforts at reforming the union. UPS used its long-standing connections to the Republican-controlled Congress to conduct a minor witch-hunt against Carey in the fall of 1998 led by right-wing, anti-union Congressman Pete Hoekstra (R.-Mich.). It should be noted that Hoekstra receives regular campaign contributions from Hoffa.

The hearings attempted to smear Carey as a "corrupt dictator" in the mold of previous Teamster leaders rather than the reformer who won a landslide victory in 1991 and a close election against Hoffa in 1996. These shameful hearings laid the basis for Carey to be expelled from the Teamsters by the federal oversight board, known as the IRB, created by the 1989 settlement of the lawsuit against the Teamsters by the U.S. Justice Department. Several years later in federal court, Carey was found innocent of the same charges that led to his expulsion from the Teamsters-yet the damage was done. The union and the reform movement led by the Teamsters for a Democratic Union (TDU) have never recovered from Carey’s expulsion. Carey remains banned from the Teamsters.

With Carey out and the reformers pushed to the margins of the union, UPS has been busy building up the non-union wing of the company. UPS Logistics and Supply Chain Solutions, Inc., are non-union UPS creations that have gone on a buying spree across the country and around the globe with a particular emphasis on purchasing air-freight forwarding companies. The purchase of Teamster-organized Menlo, one such air-forwarding company, is only a small glitch in their plan. UPS also went on an unprecedented building spree, constructing the mammoth World Air Hub in Louisville, Kentucky and a huge hub at the former Clark Air Force base in the Philippines, to facilitate its China operations. A recent article in the New Yorker magazine provides a clear picture of what a mammoth global corporation UPS has morphed into.

While UPS has been busy building its global empire, Hoffa has been doing what Hoffa does best-dithering away important opportunities and protecting his reputed mob friends. During the 2002 contract negotiations between the Teamsters and UPS, Hoffa initially put forward proposals to get "card-check" recognition for UPS’s non-union companies, but he quickly withdrew them from the table. The implications of what a disastrous decision this could be at UPS exploded in Hoffa’s face on Labor Day 2002, at another Teamster-represented company, Consolidated Freightways (CF). On what should go down in Teamster history as Black Monday, CF announced that it was closing its doors and all 15,000 of its Teamster members were fired. For a decade, CF’s parent company CNF had been moving work from the unionized CF to its non-union wing Con-Way. Is CF the future for the Teamsters at UPS? It could be.

None of this has caused a stir at the Marble Palace (the name of Teamster headquarters) in Washington, D.C. Hoffa and his cronies are too entangled in the many corruption scandals that have embroiled the top levels of the union. Two of Hoffa’s "special assistants," Dane Passo and Carlow Scalf, have either been expelled from the union or forced to resign their positions. Ed Stier, the former top corruption investigator of the Teamsters appointed by Hoffa, resigned along with his entire staff last year after it became clear that Hoffa was blocking a serious investigation of corruption in the Chicago Teamsters. Stier’s final reports on Teamster corruption in Chicago were finally released to the public not by Hoffa, but by TDU in May. Stier reported to Hoffa that one-third of Teamster locals in Chicago are under mob influence and engaged in possible corrupt practices. Chicago has the largest concentration of Teamsters in the country and is a traditional bastion of Hoffa’s support.

During the last few years, Hoffa’s suffocating control of the union has begun to fray at the edges. In Seattle, Atlanta, and Milwaukee, reformers have won control of important Teamster locals. The Central States Pension Fund, the largest pension fund for Teamsters, teeters on the edge of bankruptcy, while Teamster trustees (Hoffa supporters) have pushed through draconian cuts in benefits. Whatever myth there was that Hoffa would restore "Teamster power" is gone. From November of this year through March of 2006, there will be races for delegates to the next Teamster convention. It is important that reformers run for delegates wherever they can, for it is there that the future of the union will be debated. Hopefully, a slate of reformers will be nominated that will challenge Hoffa for the leadership of the union. But the goals must be clear: Overnite must be organized and Hoffa must go.

There is a clear and present danger at UPS for the Teamsters. The direction of our union has to be fundamentally changed if the statement on the masthead of the union’s Web site is to ever mean anything again, "The World’s Most Powerful Labor Union."

Originally published in the International Socialist Review #42, July-August 2005