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UPS Down On Strike Threat

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The package carrier’s pilot union gives its blessing to leadership to call a strike without another vote.

UPS share price fell to $73.04 this morning after a close of $73.52 yesterday, as the Independent Pilots Association received authorization from UPS pilots to call a strike.

Talks on a new contract, under the auspices of a federal mandate, have been underway for two years. Under provisions of the Railway Labor Act, pilots cannot strike while talks continue.

More talks have been scheduled for dates in May, the 16th and the 26th. Compensation remains a sticking point; UPS states pilots make an average of over $175,000 annually.

Chinese Expansion On Hold

And the prolonged talks have put a crimp in plans by UPS to expand farther into China. With that market’s rapid expansion, the carrier needs to establish itself on the mainland with a greater presence. They have opened three warehouse and distribution centers, and plan to open twenty more.

An unstable relationship with its pilots jeopardizes those expansion plans. UPS strategy places distribution centers near production centers in China. And to support them, the company increased its flights from six to eighteen per week last fall.

Further, UPS has filed its intent to add three more flights with the US Department of Transportation. Also, the company wants to establish an air hub in Shanghai in 2007. These initiatives require a satisfactory resolution to the pilots’ contractual requests.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.

UPS Down On Strike Threat
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