Negotiation Analysis

May 2, 2010 UPS/truck drivers call on the carpets in 1997 Introduction In 1997 united parcel service and the Teamsters were on table a seduce subsequently 1993s edit duologue. It was common since 1980s that wedding sent signals to centering slightly large concessions before e genuinely negotiation. coalition do it short before the 1997 negotiations started that These negotiations be active only one thing and that is reservation forward motions that pull up stakes give our members the security, opportunities, refuge, and standard of living that they deserve (Witt, Wilson, 1999). In 1996 UPS report $22. 4 one thousand thousand of sales. 0 percent of the nation package slant business was chthonic control of united parcel service. UPS had 185,000 Teamsters employees. Majority of these employees were branch eonrs and former(a) entire agers. While reported cosmos a remunerative company UPS commission said that to stay lucreable and beat its competitors they t ake on to negotiate the contract wisely and its employees need to cooperate with them. The emphasis on transnational business and expedited air shipments was driving the growth of the company. The air place of UPS operates virtually separately than the ground operations.This is where people worked odd mins and had to meet bastardly operational deadlines. The ground portion besides consisted of majority of the dissociate cartridge holder workers (Budd, 1997). The Teamsters was divide of the AFL-CIO. AFL-CIO was a federation consisted of 78 different national and international gists. Overall it had most than 13 million members. Teamster was a double in it as puff up. It was presenting 1. 4 million members including about 400,000 awarders twain in unite States and Canada. league leadership told its members to be take awayensive in the negotiation to stay in power.Teamster had slightly part horologes in their rank and file and these part clockrs made 57% of the su m UPS employees. These part timers had big interest in this negotiation and were looking forward to induce heard in the negotiation. The subcontracting was a big issue for these part timers which too made a big part of the total Teamster labor membership (Bacon, 1997) & (Witt, Wilson, 1999). analysis At the time of 1997-contract negotiation, democrats were in power. Mr. Clinton was on the president seat. As democrats are seen historically in favor of the conglutinations, teamster could expect government concomitant for sure.The 1997 economy was doing nifty. It had the great combination of pissed growth in interior(prenominal) product, individual income and actually low inflation rate. There was to a fault very low unemployment rate at this time. Economy was aggrandizeing in yr 1997 since 1991 (USDA, 1997). every last(predicate) this was favoring teamster, which was all ready for the negotiation with UPS. Solid economy meant that UPS was doing great in the business. UPS reported a great sale in year 1996, which was, enjoin add in 1997. guidance had no reasons to lay back on employee demands. They were in a better position to be much free-handed and giving to their employees if they precious.Low unemployment rates in addition put UPS in a difficult position. If Teamster precious to go on aim UPS could eat hard time filling all the vacancies. The situation was in great favor of the union side if they precious to adopt (Lecture nones). Initial demands some(prenominal)(prenominal) sides came with their own projects and claimed their visualises to be beneficial to the employees. Both UPS and teamsters saw advantage of tyrannical the aid funds. Management treasured withdrawal of its contribution to the pension funds. By pulling out of this computer programme company could be better off financially.It could cost UPS around $700 million in withdraw liability charges. To get out of 31 multiemployer intentions. Instead UPS was unbidden to contribute $1 billion a year to a single-employer invent. UPS wanted the wide control of the pension funds. UPS plyed to stomach a single utility pension plan to twain encompassing and part time employees. An other(a) offer that circumspection made on the table was to create a new company administered wellness care program. The union administered the current plan and attention wanted full control of the program and promised to provide same existing advantages (Bradford, 1997).Union open up with demands that it claimed to be essential for its members. These demand included fair prosecutes and flop pensions plan. At the time full time UPS employees worked $19. 50 per hour and withal 410 to $11 per hour in fringes. According to the union management their members deserved to be able to live a equal life. adjoining union concern was about its part time employees. As more than half of the employee working at UPS was part timers, their voice was also strong in the nego tiation demands. Union demanded to make these part timers full timers and provide them same employ rate and full timers.Job security was also an issue that union wanted to be addressed in the negotiation (Bradford, 1997). UPS believed in subcontracted to make company more profitable and union was well conscious(predicate) of this accompaniment. In the previous negotiations UPS had won subcontracting provisions and management wanted to nutrition this benefit in their plate in this negotiation as well. But, union did not alike the way things went in the last negotiation, and this time they wanted to make sure that they do not let management take advantage of subcontracting.Union was very strong on the depression that its members deserved the job security which is only possible by acquire rid of the subcontracting. Job safety and health improvements were also great concerns to the union in this negotiation. Union believed that UPS employee get injured more often safety was a big concern. Union believed that present safety programs were not enough. An improvement was definitely needed in this area as well (Schulz, 1997). UPS strategies To bushel for the 1997 negotiation, Teamster started analyzing management previous and up to date negotiation tactics.Management strategies included shift of more workload to lower wage part timers and also expand subcontracting. Even though company was making profit at the moment, company wanted to save money to increase its total profit (Witt, Wilson, 1999). Management proposed little wage increase than in the noncurrent negotiations. Starting with lower wage increase could benefit the company in counterbalancing any workers proposal during the negotiations. Division among part timers and full timers could also benefit management as some(prenominal) sides would have different priorities and will benefit management on the negotiations table (Witt, Wilson, 1999).In 1994, when UPS raise the package w octad, many a(prenomin al) reformers wanted to walk out but many old-guard local leaders urged them not to work out. Management believed that same will happen if the members wanted to let out in this negotiation. Management was under impression that if the top union leadership will want to have a overhead the old-guard locals will not support it (Witt, Wilson, 1999) & (Bradford, 1997). Union strategies Union was well aware of the fact that membership adept was the secernate for the success of the negotiation.To prepare membership unity union wanted to make sure they everyone is on the same page. Union started a yearlong campaign to well prepare for the negotiation table. to begin with the contract was expired, union took a persuasion of all its members. The survey wanted everyone of rank his or her priorities of the demands. The very key thing in this survey was that members were also asked about the activities member were ordain to participate to help r all(prenominal) this negotiation (Witt, Wi lson, 1999). At the end of the surveys completion union had a good idea of what its membership wanted and how the things shall be proceed.This step helped union gain its members confidence and its members also felt being part of the process. The surveys helped Teamster to talk to their members and encourage them to get mingled into contract campaign. Teamsters main(prenominal) mission was to find a common ground for all its membership (TDU, 2007). Union leaders try emphasizing on the common interests of both(prenominal) part timers and full timers. Union tried convincing its members that no occasion whether they are full timers or part timers, the issues they will be battle for on the negotiation table will be beneficial to both sides.A better pension plan will benefit full timers as well the part timers as better pension plan will encourage full timers to retire former(a). Finding this common ground was primary(prenominal) for the union, so that it can make managements sche me of division among full timers and part timers would fail (Witt, Wilson, 1999) & (TDU, 2007). To make its campaign roaring teamster focused on building a stronger network among its members. Union tried making as many members possible to get involved in the campaign. Teamsters built a member-to-member network to spread the word about the campaign and to get as many UPS Teamsters involved as possible. dialog Table By bonking exactly what its members wanted, teamster started negotiation by being very aggressive about its demands. On the start of the bargaining, UPS heart-to-heart by asking for huge concessions. It was nothing new for the Union. It was a very commonly used tactic by the management to stat with low offer so teamsters lower their expectations. Management wanted to make sure that it does not end up giving up too much and by making initial offers very low it can change Teamsters minds to fight for big concessions (TDU, 2007). There were two big issues where both sides fell apart.First issue was the pension plan. As we mentioned foregoing both sides was benefits in controlling the pension funds. UPS offered one plan on the negotiation table. below which the future retirees will get monthly benefits equal to $ cytosine each month for each of the years they have worked for the company. Under this plan a full time employee who would retire after working for 35 years for the company would earn $35,000 each month as their pension. Under this plan part time employees were also eligible for the pension plan. The plan offered part timers half of what was offered the full timers.The previous plan was a multiemployer plan that UPS wanted to get rid of. According to management this new plan would pay employee more than what is being offered under the multiemployer plan. Teamster on the other hand was not willing to change the pension plan. It wanted to keep the multiemployer plan but wanted to improve the multiemployer plan and raise the benefits offered under the plan (Bradford, 1997). Under multiemployer plan UPS was paying for other retirees of Teamster who never worked for UPS. Under multiemployer plan, UPS was subsidizing other companies benefits. UPS did not want to do that any longer.As their mission was to increase company profit and stay in the competition, the best(p) alternative for them was to get out of multiemployer plan and take control of the pension funds. In a statement UPS said that it wanted its money to go to only its employees. Another point UPS made was that company will earn a greater investment return on contributions made to a pension plan controlled by company compare to the multiemployer plans (Bradford, 1997)& 15 & (Krause, 1997). sanction big issue that made both sides apart was about part time workers. UPS wanted to keep part timers to stay flexible.Part time workers have been part of the company since expedited service has started. Company made an careen that not only part timers let company work b e flexible but also short length shifts are little tiring than the full-length shifts. Arguments were being made that it is hard for a someone to unload or load a trailer for continuously eight hours. When part timers were very beneficial for the company, Teamster was very well aware of that fact that part timers get paid less(prenominal) and receive less benefits compare to the full timers. UPS wanted to continue its expansion of its part timer work force.Teamsters knew that they had to stop this expansion for its members well being (Krause, 1997) & (Bradford, 1997). Union surveyed many part timers before negotiation started and they found that these part timers did not bump like being important in the company. Many of them were looking for other jobs, as their part time jobs at UPS were not paying enough. Teamsters argued that embodied managers are holding on to the workers wages as corporate profits are increasing and executive salaries are also increasing with it. All this is affecting part timer who are liner insecure jobs and a low pay (Grant, 1997).A final offer on July 30th by UPS did not include what teamster was willing to settle for. UPS offered to start providing 200 new full time jobs per year expansion of subcontracting for the feeder work and it did not include a befitting wage increase for the workers. UPS also stood still on its decision of pickings full control of the pension funds. On August teamsters decide to go on strike, the strike which changed the history of labor force forever. Teamster inscribe From the very beginning, the unions contract campaign was designed to build a broad public support.This support could help teamsters win a good contract or win in a strike if needed. The campaign held a message that Teamsters fight is not only about fighting for wages per hour but about the future of good jobs. Teamsters spread its word not only deep down the US but also many European countries where UPS was planning to expand its busin ess to (Witt, Wilson, 1999). Union kept its position strong on the issues of privacy funds and workers health insurance. UPS in its previous negotiations also offered the same pension plan but this time teamsters were not willing to play this game.UPS use to take this offer off the table at the very last minute in return to get union accept other concessions. In the end management asked union for the supplement of the agreement but union denied. On August 1997, teamsters went on strike (Witt, Wilson, 1999). Success of Teamsters strike had many reasons behind it. Around the time of the strike UPS owned about 80% of the ground delivery business. Clearly a strike would affect companys stability and put some economic pressure. UPS was not conglomerate with any company, which could help it get through with(predicate) the strike. UPS workers use to go to each city so it became known very quickly.Another specific incident that helped this strike was that it happened in August when rel ation back was not in session. During this period it was easy for the Teamsters to get all the media circumspection they needed (Cabell, 1997). UPS strike also got great support from the international unions of UPS in other countries. This involvement raised the public awareness not only in Unites Stated but also all around the world. When employees in U. S. went on strike employees in many other courtiers participated in activities like sick-out or temporary disrupted package deliveries (Budd, 2008 pg 450).At the end of 16-day strike union had a solid victory. Where originally company offered only g-force full time jobs for the part timers ended up creating 10,000 full time jobs. UPS also agreed on keeping the existing multiemployer pension plan. It was a big victory for Teamsters. Besides winning on the two biggest issues Teamsters also won on others concerning issues. There was $3. 10 an hour wage increase over the course of 5 years contract period for the full timers. UPS orig inally offered only $1. 50 an hour increase. Part timers also got wage increase more than what company originally has offered.They got $4. 10 per hour wage increase where company originally has offered only $2 an hour. There were also limits on subcontracting on the final contract (Cabell, 1997) & (Schulz, 1997). Summation As we mentioned earlier political, economic environments were in favor of the union. Both sides referred to the previous negotiations and based on that built their tactics for 1997 negotiation. It was a distributive bargaining where both sides wanted to gain as much possible. One could say that union was being selfish on many aspects where it wanted more and more for its members.As it is a case in any distributive bargaining, both sides wanted more in their favor. There was no effort for mutual mind and finding a common ground. Beside one or two issues roughly every other issue could be resolved with little decent effort made by both sides. Both sides had strate gies and both sides tried knowing what was going to be on the negotiation table. Based on our above analysis we can say that union was more fortunate in knowing management strategies and planning ahead for any of the managements tricks. Union strength was not clear to UPS until it showed it power by pulling out a successful strike.Strike cost UPS millions in lost sales during the strike. Everybody seemed to be having won but UPS. More losings were alarming UPS as many shippers threatened to permanently shift to non-union competitors. Questions farm like what went wrong in this negotiation which leads to strike and whether teamsters were being transparent selfish in what they wanted. UPS employees were enjoying relative job security at the time. Also, the tackle rate at UPS was low compare to the industry-wide rate. In many exceptional jobs task managers like first-line managers were being paid the highest wages in the industry.The executives at UPS were not getting paid outrageo usly (USDA, 1997). Management might not have thought union will be that aggressive as it came out to be. There was a wall, which stopped each side from apprehensiveness one another. A good alliance of 82 years was disordered with this strike. UPS and Teamsters needed to understand each others priorities and strengths. Trying mode of interrogative bargaining could help both sides reach to an agreement without strikes and economic losses. In order to accomplish this, both sides must realistically take as much information as they can to understand each others interest.A key for the Teamsters strike was its successful attempt to mobilize high ranks. Involvement of the key individuals in favor for the strike was very important part of the successful strike. Next key for the Teamster success was to be able to know the issue that resonates with the general public. It was very important for UPS to know what Teamsters strength was. Underestimating labor power was a key mistake that the management seemed to have made. Only an open and honest relationship among the management and Teamsters can help avoid strikes in future. References 1. Witt, Wilson, Matt, Rand. The Teamsters UPS Strike of 1997 construct a New Labor Movement. Labor Studies Journal. 24. 1 (1999) 58-72. Web. 22 Apr 2010. http//www. accessmylibrary. com/article-1G1-54517324/teamsters-ups-strike-1997 .html (Pro-union) 2. TDU, 1997 ups contract year-long contract campaign key to win, Teamsters for a Democratic Union. 03-06-2007, Web. 29 Apr 2010. http//www. tdu. org/node/5252 (Pro-union) 3. Cabell, Brian. (1997, August 20). Its official teamsters end ups strike. Retrieved from http//www. cnn. com/US/9708/20/ups. update. early/ (Neutral) 4. Bacon, David. (1997, August 24).The Ups strike unions win when they take the offensive. Retrieved from http//dbacon. igc. org/Strikes/07ups. htm (Pro-union) 5. Michael Bradford. (1997,August). UPS, Teamsters boxing on benefits. agate line Insurance,31(32),1,25. Re trieved April 29, 2010, Business Insurance v31 p1, august 11, 1997. (Neutral) 6. JOHN D. SCHULZ. (1997, August), Digging In. dealing world. V251 p10-13 august 1897. http//vnweb. hwwilsonweb. com. ezproxy. lib. uwm. edu/hww/results/results_single_fulltext. jhtmlhwwilsonid=KSIR1EBXDQ24PQA3DILSFGOADUNGIIV0 (Neutral) 7. Kristin S. Krause. Part-Time and Pensions. Traffic World v251 p11-12 August 11 97. (Neutral) 8. rear D. Schulz. Keeping the dream Live, Traffic World v249 p33 March 17, 1997. (Neutral) 9. John F. Budd. What the Teamsters Knew. Budd Jr. , John F, Initials. (1997, Nov-Dec). What the Teamsters knew. Across the Board, 34(10). (Neutral) 10. GRANT, L. (1997). How UPS Blew It. Fortune, 136(6), 29. Retrieved from Master FILE Premier Database. (Pro-management) 11. hydrogen R Hoke. (1997,September). The UPS strikes winners and losers. Direct Marketing,60(5),80. Retrieved April 29, 2010, from ABI/INFORM Global. (Document ID15113521). (Neutral) 12. John J. Schulz. August,1997), Many Winners, One macro Loser. Traffic World v251 p11-12+ August 25 97. (Pro-union) 13. USDA. The 1997 Economy An Overview. (1997), Economic seek service. Web http//www. ers. usda. gov/publications/aer780/aer780b. pdf (Neutral) 14. Robert J. Grossman. Trying to heal the wounds human resources management at United Parcel Service of America Inc after a labor strike. HR Magazine. Apr, 2010. http//findarticles. com/p/articles/mi_m3495/is_n10_v43/ai_21136884/ (Pro-management) 15. Budd, John W. Labor Relations Striking a Balance, second Edition, McGraw-Hill Irwin Publishing Chicago, 2008. (Neutral)