UPS (NYSE:UPS) CEO Carol Tome said the costs incurred by the company for the new Teamsters contract are less than the ”$30 billion in new money” touted by the union, as the company aims to sell investors on the agreement.
“It’s not a $30 billion deal,” Tome told the media in an exclusive interview on Monday. But Tome declined to reveal the internal projection as the company released its first presentation to investors outlining the labor expenses after the bell Monday.
UPS said 46% of the compensation in the deal would be in the first year. Tome called the agreement cost-effective and fair.
The labor contract reached in July prevented a potentially widespread and disruptive work stoppage. A Teamsters strike would have been the “costliest in a century,” creating a $7-billion hit to the U.S. economy in the first 10 days, according to a widely reported estimate from Anderson Economic Group.
At UPS, full-time drivers will earn up to $170,000 in pay and benefits in the last year of the contract, while part-time workers will see their starting pay rise from $16.20 to $21 an hour.
Official negotiations between UPS and the Teamsters began in April, as union leaders urged members to mobilize and create a “show of force it needs to take on the company.” In June, Teamsters members authorized a
UPS strike during the negotiations. Weeks later, both sides accused the other of walking away from the contract talks.
UPS shares staggered $5.26, or 3.3%, to $155.56.
