Massive Layoffs At UPS A Big Win For The Union!

Hey, all you anti-union people - you know who you are. Yeah, you...the one who fell for the anti-union propaganda that corporations put out over the years, and you think workers should not band together to make sure they get their fair share of the pie? Well, the union just had a huge win, and I'm about to help you understand how unions work and why they're so vital.

Back in August '23, the union at UPS negotiated a massive pay increase for the drivers and package handlers. Here are some details:

When the UPS union received a pay raise in August 2023, it wasn't just drivers who benefited. The raise applies to a broad range of employees represented by the International Brotherhood of Teamsters (IBT), the main union at UPS. This includes:

Drivers:

• Package car drivers (delivery drivers)
• Air drivers (transporting cargo within airports)
• Feeder drivers (connecting sorting hubs)

Non-Driver Roles:

• Loaders and unloaders
• Sorters who handle and route packages
• Clerks who manage customer interactions and paperwork
• Mechanics who maintain vehicles and equipment

Well, the company just announced they're laying off 12,000 workers. Now you're probably thinking what the rest of the country seems to be thinking; the union screwed themselves, and many of them are losing their jobs.

WRONG! Just the opposite. The union folks are keeping their jobs, but guess who isn't?

Management!

From the article Just Months After "Massive Labor Deal," UPS Announces Massive Layoffs:

Five months after unionized UPS workers ratified a massive five-year labor deal that included massive pay bumps, the logistics company announced on Tuesday morning that 12,000 jobs, or about 14% of its 85,000 management jobs, would be cut.

She said the layoffs would save the company about $1 billion this year.

She went on to say the layoffs were due to soaring union labor costs.

For you anti-union folks who don't understand how the world works, let me fill you in. Management at large corporations becomes bloated, lazy, and unproductive over time. Managers get lazy and hire managers under them to manage their work for them. Those managers, in turn, get lazy and hire managers under them. After a while, you have bloated layers of management bureaucracy that do very little except collect a huge salary, manage other managers, and go golfing.

The ultimate goal in corporations is to keep the company growing. As long as the company can meet its growth targets, everyone is happy.

Since management does the hiring and sets wages, they vacuum up as much money as they can for themselves, while still meeting growth targets, and leaving the minimum necessary to keep the workforce they need.

After a while, the workers begin to see it. They say, "Ya know what? Management is making a killing, and they're doing nothing to earn it. We're doing all the work and making beans. Time to get our fair share!"

And so they did.

Now that the company has to pay its workers a fair wage, what did the company have to do to meet its growth targets? They had to lay off 12,000 managers, saving the company $1 billion per year!

That's right, folks. UPS management was vacuuming up $1 billion per year for themselves, and it turns out the company didn't even need them! In fact, the company will almost certainly run better without the inept bureaucracy.

So the money will now go where it belongs, to the workers, who banded together to make sure management didn't abuse the company's money.

That's how unions work. They keep management in check.

Elon Musk has said all along that he doesn't think unions should be necessary because management and the workers should come together to make things fair for everyone. Maybe that's how it works in his corporations, but it's not how it works in most corporations.

Now, I know many of you are anxious to fire off your anti-union propaganda that you've been fed by corporate management over the years, but I'm too busy clapping and cheering this victory to hear you. So I'll leave you with this chart, that shows the disparity in wages between workers and management in recent decades as the unions lost their power:

Notice what happened when the unions lost their power starting in the late 70's. Management pay skyrocketed. Now here is what's interesting. Why did you see the huge dips around 2000 and 2008? Those were recessions. When recessions hit and corporations have to cut back, management wages decrease dramatically. Also, when workers get their fair share, management gets cut dramatically.

In other words, if you don't force management to stop vacuuming up all the money, they'll take everything they can get, and leave everyone else with as little as possible.

This is not true for all management, but for those managers who aren't interested in fairness, unions level the playing field by giving workers their fair share.

Big win for the workers! God Bless America!

Brett you make some very good points, however I still won’t convert to be a fan. I feel the unions have become what they fought against in the beginning.

I was a teamster member for 25 years. They initally came in gave great speeches about what they could do for us. A sales pitch. Over time we rec’d less and less attention from them. They always went for wages and very little attention to benifits. This was because the unions dues were set off of wages. By the time I retired we paid every paycheck however could hardly get ahold of them except at contract time.

The automakers strike was huge. Alot of autoworkers have and are loosing their jobs because of the union actions. Those who keep their jobs will do well, but I bet the ones that become unemployed won’t be as happy. The automakers all warned it would happen during negotations. The union denied it saying it was just propaganda. Well we now see who had the best insight.

As I understand UPS those 12k are a mix of management and other non union employee’s. They also are selling their brokage, coyote logistics to recap that 1 billion number.

Alot of autoworkers have and are loosing their jobs because of the union actions.

PJ, you're a sharp dude. You seem to "get it" with just about everything. So maybe I'm the one who just doesn't get it this time. I'm asking you or anyone who has a better understanding of this situation to explain it to me.

If the company can't afford to pay their workers a little more money, how can they afford these yearly salaries?

General Motors:

Mary Barra (CEO): $28.98 million

Total Executive Comp: $109.8 million (includes CEO, CFO, COO, EVPs, General Counsel)

Ford:

James Farley (CEO): $20.99 million

Total Executive Comp: $70.7 million (includes CEO, CFO, COO, EVPs, General Counsel)

Stellantis (formerly Chrysler):

Carlos Tavares (CEO): $24.80 million

Total Executive Comp: $88.5 million (includes CEO, CFO, COO, President - North America, CFO - North America)

Elon Musk (Tesla CEO):

$231.50 million (note: this compensation package consists almost entirely of stock options)

Total Executive Comp (not including Musk): $69.7 million (includes CFO, Chief Legal Officer, President - Automotive)

So your CEO makes $30 million per year, and the top 10 people make $100 million per year, but when they say they can't afford to give anyone a raise, you believe them and blame the union for even asking?

It seems to me the CEO and his buddies in top management are stealing all the dough, sending American jobs overseas, and laughing their asses off all the way to the bank when they hear it was "the union's fault" this happened. At least, that's what I thought was happening.

Am I just a simple fool who can't do basic math? Maybe the ways of the business world are beyond me. Please, someone help me understand why the top 10 people should earn $100 million per year, but the workers should shut up and be happy for what little they get.

Here's FedEx and UPS:

FedEx (Fiscal Year 2023):

Total Executive Compensation: $47.8 million (includes CEO, CFO, COO, EVPs, General Counsel)

CEO Compensation: Rajesh Subramaniam received $19.7 million in total compensation (salary, bonus, stock options)

UPS (Fiscal Year 2022):

Total Executive Compensation: $36.2 million (includes CEO, CFO, COO, EVPs, General Counsel)

CEO Compensation: Carol Tomé received $14.9 million in total compensation (salary, bonus, stock options)

Your right those managers should NOT be getting paid those types of salaries and comp packages. The exec types across the board wether it is a company, a union, or gov’t folks are self serving and greedy. The entire socital fabric is out of whack in my opinion.

So we end up with folks kicking and gouging for their piece of the pie instead of things being more equitable and structured so everyone benifits.

The entire socital fabric is out of whack in my opinion.

So we end up with folks kicking and gouging for their piece of the pie instead of things being more equitable and structured so everyone benifits

Amen to all that! I'm with ya all the way.

Our town's paramedics, who will wake from sleep and rush to my house in a snowstorm at 3 a.m. to save my life, are volunteers, but my team's quarterback has a $258 million contract that averages $43 million per year?

By the way, football players have both a union for all players and agents for each player. Do you know what NFL players would make if they didn't have an agent or a union? Probably $25/hour.

Brett, when you said management becomes bloated, lazy and unproductive over time, I was sure you were talking about Congress.

Brett, when you said management becomes bloated, lazy and unproductive over time, I was sure you were talking about Congress.

Yeah, ain't that the truth! Most of them might be older than dirt and completely incompetent, but at least they're corrupt sociopaths.

Seriously, though, when I mentioned bloated management, I was thinking about the government at the time, as well. The scenario I describe at UPS resembles what has happened to our country. The management (govt) has become so bloated and powerful that they're sucking the life out of the economy and the people. They've gone from serving the people to dictators. They're taking everything they can for themselves, and leaving little or nothing to anyone else when possible.

Most of the people at the top of corporations and governments must be held accountable and in check. How do we do that? Not as isolated individuals, I can tell you that.

My ideal for a union would be a drastic departure from the existing structure. I've often thought about a better way to unionize and why most of us don't want one.

An all volunteer based organization with elected representatives that were term limited.

The union would be funded by voluntary contributions. The unions budget would be transparent and all financial matters would be transparent.

The basic structure coming from the 12 concepts of service and 12 traditions of 12 step groups, which have proven to be extremely successful. Not all of the traditions and concepts would be used, but enough to make a backbone.

It may sound nuts, but somehow millions and millions of drunks and addicts handle billions of dollars in revenue through this very system with absolutely zero corruption and malfeasance.

In removing the lure of retirement funds, pensions and fees, you would eliminate the corruption and greed that defines all present unions.

The basic problem of unions in trucking is that they will not embrace any form of compensation other than hourly and they fleece the drivers as well as the sheer greed and avarice of the union leadership. The union shouldn't hold the pension and retirement funds, the emoloyers should be forced to provide that.

The union would have one primary purpose, to secure the best possible working conditions and pay for its members. Assuming that 51 percent of a shops force approves, the union would have collective bargaining rights and the ability to strike. Funding for strikes would be held in escrow and originate from the voluntary contributions.

It would elevate all compensation formats with a tiered experience and skills based pay scale, in the form of apprentice, journeyman, and master.

In return, union drivers would be superior in skills, safety and reliability. Particularly so with ongoing training and education and resources for members.

It's a simple cconcept. if drivers and OOs were united under this, it would immediately cause labor costs to go up, drastically. Which in turn would cause the carriers to charge more, which in turn would cause the shippers to have charge more, or so were told. But the reality I think lies more in that carriers would charge more and relinquish some of the profits as would shippers until they find a balance between what they can charge and what they must pay.

Thank you Brett for putting it so eloquently and straightforward. I've said it for years that the problem with most places is bloated and superfluous management collecting huge pay packages while producing very little. Many organizations have 3 managers doing the job where 1 would suffice . I see this in the public arena quite a bit Top heavy companies and organizations looking to cut labor costs when it's really the boy's club at the top which cause the bleeding.