UPS-IPA neg update
 

Fellow IPA Members:

Two weeks of contract negotiations wrapped up at approximately noon
yesterday in Baltimore. Here is the IPA team's perspective on what
happened:

1. The talks were set by the National Mediation Board with the stated
goal of reaching a tentative agreement by May 26. The first week was to
be devoted to closing out non-economic issues and the second week was to
be devoted to closing out economic issues.

2. During the first week of talks, views were exchanged on the area of
scope and discussions continued on remaining outstanding scheduling
issues. When limited progress was made, the IPA proposed working
through the weekend. Management representatives stated their preference
and intention to return home and reconvene the following Monday, May 23.

3. Prior to leaving town on Thursday, May 19, UPS representatives-for
the first time-disclosed that a major dollar difference existed between
the Company's costing of the IPA pension proposal and the Association's
costing model.

4. IPA representatives were stunned. For the past two years, the IPA
has worked with a highly rated independent pension actuarial firm as
well as a Washington, D.C. based pension attorney with extensive pilot
pension collective bargaining experience to produce a costing model of
the IPA's pension proposals. Unlike past negotiations, the Company
repeatedly declined (over the course of the past two years) to hire
their own actuarial firm-citing the high cost of actuarial analysis as
the driving consideration.

5. During the past two years, the Company repeatedly expressed
confidence in the IPA's actuary and said "there's no need to spend the
same money twice-we will rely on your firm for the costing data."
Association offers were repeatedly made over the past two years to
encourage the Company to engage their own actuary firm to cross check
the IPA numbers in order to give the Company confidence in the final
cost of the pension plan. Repeatedly, these offers were rejected and
the Company insisted they were prepared to rely on our firm's numbers.

6. Over the course of the past two years, the IPA has spent nearly 1
million dollars on professional fees associated with costing and
developing our pension proposals.

7. Meeting back in session in Baltimore on Monday the 23rd, UPS stated
that they were unprepared to move forward to negotiate in the area of
pension. As a reason, they cited the cost differences between the IPA
model and the new "UPS model." They stated that the only basis they
would negotiate pension would be if the Association accepted the much
higher UPS numbers. Management representatives added that the UPS
numbers meant the Company could "never accept" the IPA pension proposal.

8. We responded by requesting that our actuary be permitted to meet
with the Company's firm for the purpose of discovering how the two
models could produce such widely divergent cost estimates. The Company
responded with a firm "NO." They stated that they were not about to
expose themselves to the costs associated with letting their actuary
have unlimited exposure to our actuarial firm's questioning.

9. IPA objected to the basic fairness of the Company declining to
jointly work with us for the past two years on developing a mutually
agreed to pension costing model and now-in the final stages of
bargaining-to use this as an excuse to refuse to negotiate pension. On
top of this was what, in our opinion, was the outrageous position that
the IPA would not be allowed to scrutinize the Company's numbers!

10. The NMB resolved the issue by instructing that the actuarial firms
work together to discover differences in the costing models. The firms
reported that it would take until June 10 to accomplish this work.

11. Following the pension costing dispute, the parties returned to the
bargaining table and closed out several issues in scheduling, health
care, and the vacation article. No discussions were held on any major
economic areas of the contract.

12. The mediators set the week of June 13 to reconvene the talks in
Washington, D.C. at the NMB headquarters. Both parties were directed to
come fully prepared to make final decisions on all open contractual
issues.

What does all of this mean, and what can we expect next? What we
know is that management representatives have perfected the art of stall
and delay negotiation tactics. We also know that as hard as the UPS PR
machine tries to convince the customer base that there are "no
deadlines" to NMB supervised negotiations and that the pilot talks can
go on forever without resolution-the customers are learning better.

Now, well into our third year of bargaining with UPS, management
owes this pilot group more than excuses. Are we really to believe that
a 100 billion dollar corporation could not "afford" to cost our pension
proposals for the last two years while the IPA could afford to hire the
best experts in the industry? What will be the excuse in June when we
meet at the NMB for contract negotiations? After three years, will the
Company be prepared to bargain when we meet next?

The IPA Executive Board and the Negotiation Committee want to thank
the membership for the overwhelming signal of support sent via the
recent strike vote. The vote lets UPS, the NMB, and the world know of
our determination. United, we will secure a new contract that
recognizes the vital contribution this group plays in the Company's
success.

In the meantime, the IPA leadership asks for your help in
continuing to uphold the pride and professionalism of our group. Do not
allow yourself to be drawn into disputes or discussions with management
concerning the contract. Do your job professionally, as always, and
support your Association as we take our cause to the public, the press,
the customers, and the shareholders.


Fraternally,

Capt. Tom Nicholson

IPA President