UPDATE 3-UPS aircraft mechanics vote to authorize strike

Tue Sep 15, 2009 12:44pm EDT

Related Topics

* 1,400 mechanics back union leadership in contract talks

* UPS says negotiations continue

* Union has warned holiday season disruptions could occur

* UPS shares down slightly; FedEx shares up 0.8 pct (Adds additional comment from Teamsters official, comment from UPS, background and byline; updates stock)

By James B. Kelleher

CHICAGO, Sept 15 (Reuters) - The 1,400 U.S. mechanics who maintain United Parcel Service Inc's (UPS.N) worldwide fleet of 263 aircraft have authorized a strike, union officials said on Tuesday, but contract talks will continue later this month.

The vote represents a ratcheting up of the pressure in negotiations between the two sides just as UPS, the world's largest shipping company, enters its busiest season.

Bob Combine, president of Teamsters Local 2727, told Reuters that 90 percent of the workers who cast ballots gave the union the authorization to call a strike if the talks break down.

"I hope this sends a clear message to the company that the membership is behind us," Combine said.

Mike Mangeot, a spokesman for the air unit of Atlanta-based UPS, described the vote as "an internal gesture to show solidarity" and said it has "no legal substance" in the contract talks, which began in October 2006 and continue under the supervision of the National Mediation Board (NMB).

UPS said more talks are scheduled for late September, a sign the process is far from deadlocked.

Until the talks officially break down and the union endures at least one cooling-off period, a strike -- even one authorized by members -- would be illegal under the Depression-era legislation that governs the UPS unit.

"We continue to believe that the NMB-supervised negotiations process will result in a labor agreement ...," Mangeot said.

THREATS OF 1997

Local 2727, frustrated by what it claims is an impasse on central issues and emboldened by what it considers a pro-labor stance by the Obama administration, insists the vote is deadly serious and could affect deliveries during UPS's crunch season.

The union's members service the planes that handle about 16 percent of UPS's average daily volume of 15.5 million packages.

"We're not posturing," Combine said. "History shows this company can badly misjudge the seriousness of its workers."

The reference is to 1997, when a two-week walkout by ground-side workers cost UPS $850 million and sent customers to rivals. Some customers never returned.

Mangeot dismisses the comparison. "That was an different employee group, different issues were at play and different labor laws applied," he said.

The central issues in the current contract talks center on what the union characterizes as UPS's efforts to outsource some maintenance work and reduce workers' benefits. UPS declines to comment on the specifics of the talks except to say that "benefits are under discussion as part of a broader economic package."

STRIKES DIFFICULT

Unlike UPS's roughly 260,000 unionized ground workers, who are covered by regular U.S. labor law, its 2,900 pilots and 1,400 aircraft mechanics are covered by the Railway Labor Act, Depression-era legislation designed to protect the nation's transportation network and commerce by discouraging strikes.

But strikes can happen under the RLA. Once a federal mediator determines that talks have reached an impasse -- a determination that can come after a request from either side -- walkouts are legal following a 30-day cooling-off period.

The cooling-off period can be extended an additional 60 days, but only if the U.S. president believes the dispute "threatens substantially to interrupt interstate commerce to a degree such as to deprive any section of the country essential transportation service."

So far, neither side has asked the mediator to be released from the talks.

Like its main rival, Memphis-based FedEx Corp (FDX.N), UPS is considered a bellwether of U.S. economic activity.

UPS shares were down 7 cents to $59.12 in midday trade on the New York Stock Exchange, while FedEx shares rose 64 cents to $79.52. (Reporting by James B. Kelleher and Nick Carey, Editing by Dave Zimmerman)

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