Negotiation Analysis

May 2, 2010 UPS/truck drivers dialogue in 1997 Introduction In 1997 united parcel service and the Teamsters were on table a ready later on 1993s snub dialog. It was common since 1980s that alliance sent signals to way roughly large concessions before e truly negotiation. compass north make it shed light on before the 1997 negotiations started that These negotiations are approximately moreover one thing and that is devising values that im spark give our members the security, opportunities, safety, and standard of living that they deserve (Witt, Wilson, 1999). In 1996 UPS report $22. 4 one million million of sales. 0 percent of the intellect package obstetrical deli rattling(prenominal) business was under(a) control of united parcel service. UPS had 185,000 Teamsters employees. Majority of these employees were bugger off periodrs and separate overflo coaxg convictionrs. While reported beingness a gainful company UPS precaution said that to stay arrive ata ble and beat its competitors they deal to negotiate the contract wisely and its employees need to cooperate with them. The emphasis on external business and expedited air shipments was driving the growth of the company. The air array of UPS operates virtually separately than the ground operations.This is where people worked odd mos and had to meet starchy operational deadlines. The ground portion withal consisted of majority of the pause age workers (Budd, 1997). The Teamsters was part of the AFL-CIO. AFL-CIO was a federation consisted of 78 different national and international heart and souls. Overall it had most than 13 million members. Teamster was a bigger in it as advantageously. It was presenting 1. 4 million members including about 400,000 grant commotions any(prenominal)(prenominal)(prenominal) in unify States and Canada. total leadership told its members to be withdrawensive in the negotiation to stay in power.Teamster had some(prenominal) part horologe s in their rank and these part beatrs made 57% of the go aroundow UPS employees. These part timers had big adventure in this negotiation and were looking forward to get heard in the negotiation. The subcontracting was a big issue for these part timers which as well as made a big part of the total Teamster labor social status (Bacon, 1997) &038 (Witt, Wilson, 1999). depth psychology 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 trades unions, teamster could expect government promote for sure.The 1997 economy was doing spectacular. It had the great combination of blotto growth in domesticated product, individual income and very low inflation rate. There was as well very low unemployment rate at this time. Economy was exaggerateing in course 1997 since 1991 (USDA, 1997). altogether this was favoring teamster, which was all ready for the negotiation with UPS. Sol id economy meant that UPS was doing great in the business. UPS reported a great sale in year 1996, which was, bet improver in 1997. heed had no reasons to lay back on employee demands. They were in a wide-cut position to be to a greater extent bighearted and giving to their employees if they treasured.Low unemployment rates besides put UPS in a difficult position. If Teamster cherished to go on look at UPS could befuddle hard time filling all the vacancies. The situation was in great favor of the union side if they cherished to pommel (Lecture nones). Initial demands twain sides came with their own objects and claimed their broadcasts to be beneficial to the employees. Both UPS and teamsters saw advantage of autocratic the pension funds. Management cherished withdrawal of its contribution to the pension funds. By pulling out of this figure company could be better off financially.It could cost UPS around $700 million in withdraw liability charges. To get out of 31 multiemployer figures. Instead UPS was impulsive to contribute $1 billion a year to a single-employer platform. UPS wanted the blanket(a) control of the pension funds. UPS offered to nominate a single improvement pension plan to two in effect(p) and part time employees. An different offer that focal point made on the table was to create a new company administered wellness care program. The union administered the current plan and circumspection wanted full control of the program and promised to provide same existing arrive ats (Bradford, 1997).Union subject with demands that it claimed to be essential for its members. These demand included fair affiances and respectable pensions plan. At the time full time UPS employees fixed $19. 50 per hour and also 410 to $11 per hour in fringes. According to the union management their members deserved to be able to live a aright life. contiguous 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 negotiation demands. Union demanded to make these part timers full timers and provide them same rent 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 sure of this situation. In the previous negotiations UPS had won subcontracting provisions and management wanted to take for this benefit in their plate in this negotiation as well. But, union did not analogous 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 persuasion that its members deserved the job security which is only possible by get 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 restore 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 erstwhile(prenominal) 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 twain sides would have different priorities and will benefit management on the negotiations table (Witt, Wilson, 1999).In 1994, whe n UPS raise the package w octad, umpteen 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 start in this negotiation. Management was under impression that if the top union leadership will want to have a give away the old-guard locals will not support it (Witt, Wilson, 1999) &038 (Bradford, 1997). Union strategies Union was well aware of the fact that membership unity was the refer for the success of the negotiation.To name 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. out front the contract was expired, union took a subject 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 willing to participate to help win this negotiati on (Witt, Wilson, 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 clack to their members and encourage them to get multiform into contract campaign. Teamsters briny mission was to find a common ground for all its membership (TDU, 2007). Union leaders attempt emphasizing on the common interests of both part timers and full timers. Union tried convincing its members that no payoff whether they are full timers or part timers, the issues they will be struggle 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 proterozoic. Finding this common ground was crucial for the union, so that it can make managements system of division among full timers and part timers would fail (Witt, Wilson, 1999) &038 (TDU, 2007). To make its campaign no-hit 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. talks Table By spoting exactly what its members wanted, teamster started negotiation by being very aggressive about its demands. On the start of the bargaining, UPS opened 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 crack 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 issu e was the pension plan. As we mentioned ahead both sides was benefits in controlling the pension funds. UPS offered one plan on the negotiation table. under(a) which the future retirees will get monthly benefits equal to $ blow apiece 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 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)&038 15 &038 (Krause, 1997). present moment 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 assembly line that not only part timers let company work be flexibl e but also short length shifts are little(prenominal) tiring than the full-length shifts. Arguments were being made that it is hard for a somebody 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 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) &038 (Bradford, 1997). Union surveyed many part timers before negotiation started and they found that these part timers did not whole tone 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 incarnate 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 go about 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 fit wage increase for the workers. UPS also stood still on its decision of winning 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 resuscitate 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 inside the US but also many European countries where UPS was planning to expand its busines s to (Witt, Wilson, 1999). Union kept its position strong on the issues of hideaway 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 cite 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 scotch pressure. UPS was not conglomerate with any company, which could help it get by means of 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 congress was not in sess ion. During this period it was easy for the Teamsters to get all the media vigilance 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 honey oil 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 originally 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) &038 (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 fellow feeling and finding a common ground. Beside one or two issues well-nigh every other issue could be resolved with little decent effort made by both sides. Both sides had strategies and both s ides tried knowing what was going to be on the negotiation table. Based on our above analysis we can say that union was more productive 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 losses were alarming UPS as many shippers threatened to permanently shift to non-union competitors. Questions resurrect like what went wrong in this negotiation which leads to strike and whether teamsters were being fair selfish in what they wanted. UPS employees were enjoying relative job security at the time. Also, the carriage rate at UPS was low compare to the industry-wide rate. In many spare jobs task managers like first-line managers were being paid the highest wages in the industry.The executives at UPS were not getting paid outrageously (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 judgement one another. A good alliance of 82 years was embarrassed with this strike. UPS and Teamsters needed to understand each others priorities and strengths. Trying regularity 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 sell 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 structure 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. line of credit Insurance,31(32),1,25. Retrieved April 2 9, 2010, Business Insurance v31 p1, august 11, 1997. (Neutral) 6. JOHN D. SCHULZ. (1997, August), Digging In. transaction 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. legerdemain 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. atomic number 1 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,199 7), Many Winners, One overlarge Loser. Traffic World v251 p11-12+ August 25 97. (Pro-union) 13. USDA. The 1997 Economy An Overview. (1997), Economic question 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)