Pilot Furloughs Are Only One Cost-Saving Measure Undertaken By
The Company
Things are looking down at Brown ... as UPS announced plans
Monday to furlough at least 300 of its airline pilots, but at the
same time continued its effort to find a solution with the
pilots’ union that would avert or mitigate the layoffs before
they take effect. UPS employs about 2,800 pilots. UPS has been
working with its union, the Independent Pilots Association, for the
past year to identify ways to cut operating costs to avoid any
pilot furloughs.
Last June, the IPA identified significant savings through
voluntary programs such as pilots taking short- and long-term
leaves of absence; military leaves; job sharing; reduction in
flight pay guarantees; early retirement, and sick bank
contributions. UPS subsequently agreed it would not furlough any
pilots in 2009.
The two sides have been working cooperatively ever since to
identify additional cost-cutting initiatives that would eliminate
the threat of layoffs entirely. Subsequent discussions have failed,
however, to identify sufficient operating savings. If the furloughs
go forward, they would be phased, with the first 170 pilots
receiving notices in 2010. The initial group would be furloughed in
May. “Even though the economy has begun to turn around, UPS
anticipates a very gradual recovery and a continued need for
belt-tightening,” said UPS Airlines President Bob Lekites.
“This is a painful decision for our people, but one that is
right for the on-going health of our business. But we haven’t
given up on this process,” Lekites continued. “We
continue to go well beyond our contractual obligation to seek a
‘win-win’ solution to avert furloughs.”
UPS is well recognized for its commitment to employees, and the
company strives to build upon its union relationships to maintain
its position as an industry leader. For example, UPS and the
Teamsters have formed a Competition Committee to identify new ways
of making UPS more competitive and to create jobs, both in its
package operation and at UPS Freight. A similar process has been in
place with the International Association of Machinists for the
employees it represents who help ensure the efficient operation of
the UPS network.
The pilot furloughs, if required, would be but one of many steps
the company has taken over the past two years to match its
resources to economic conditions. UPS has engaged in a
company-wide, $1.4 billion cost-cutting effort that included a
freeze on management salaries in 2009; suspension of the match for
401(k) plans; trimming capital expenditures, and retiring older
aircraft.
Most recently, UPS announced on Jan. 8 it was streamlining its
entire domestic U.S. small package structure, eliminating 1,800
management and administrative positions across the country.
“Companywide, we will continue to evaluate all opportunities
and make adjustments as necessary to ensure our company is
well-positioned to emerge stronger than ever as the economy
continues to recover,” said Lekites. “We applaud our
pilots for the way they’ve joined with UPS in trying to
tackle this problem and hope we can identify a mutually beneficial
outcome.”