I work for UPS as a driver and have no shares of UPS.
I'd like to have a discussion on what are your thoughts will happen to UPS's share price once the new contract comes into place. The union and UPS renegotiate every 5 years for their contract and the next contract ends July 31, 2023.
With a new union president and work place/force situation worldwide, there are high expectations for this new contract from higher wages, more vacation time and more.
One thing I'd like to point out is there are two types of drivers, but do the exact same job. 22.4 driver is Tuesday-Saturday and is basically a cover driver and is used for whatever the company needs for the day. The second type of driver is a RCPD driver which is basically having your own area every day Monday-Friday, although there are some RCPD cover driver positions. You go from 22.4 to RCPD by having seniority.
The big difference is 22.4 makes less money than the RCPD. Both classes of drivers go through a 4 year progression of pay. On a side note if you are on year 2 of being a 22.4 and you get a RCPD position, you jump to year 2 of RCPD.
Pay may differ depending on area, but this is mine.
22.4. RCPD
start: $20.50. $21.00
year 1: $21.75. $23.00
year 2: $22.75. $24.00
year 3: $25.00. $28.75
year 4: $30.64. $40.00ish
The company takes advantage of the 22.4s and slams them with extra work so they don't have to pay as much over time to the RCPDs. The union wants to dismantle the 22.4 position and make everyone a RCPD. I'd expect their days worked would stay the same. We all have Sundays off in my area.
The union also wants to cut down the pay progression from 4 years to 2. The company also needs to pay more for warehouse workers who load/unload trucks every morning and night as they can't attract any workers to stay very long.
Do you think if the share price gets back up to the $200 range, would it be smart to consider a short position with these massive changes and a possible union strike next year?
I'd also point out that UPS has made MASSIVE gains over the past couple of years and it doesn't seem to be slowing down by a lot as it's the new norm. I don't consider amazon a threat, but I do believe they will take business away in the long term. UPS had a contract with Amazon to deliver their packages, but didn't make a ton of money on all the small packages. I believe amazon delivery is bigger in the big cities, but out in smaller areas they haven't reached that yet and that's where we come in.
Thoughts?
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