UPS to sideline 300 pilots
UPS said Monday it plans to furlough 300 pilots, or 11 percent of its 2,800-member force, to bring costs more in line with demand.
The package and freight delivery company said it is still working with the Independent Pilots Association, which represents UPS pilots, to identify cost-cutting measures that could forestall or mitigate the action before it takes effect in May with the first tranche of 170 pilots.
UPS and the union last June averted any unpaid leaves of absence when pilots agreed on a voluntary program of measures to get through the year such as short-and long-term leaves of absence, military leaves, job sharing, reduced in-flight pay guarantees, early retirement, and sick bank contributions. The measures were intended to save the company about $90 million of the three-year target of $131 million in operational cost cuts. UPS agreed at the time not to furlough any pilots through April 1, 2010, but the union has not been able to find any additional savings since then.
'Even though the economy has begun to turn around, UPS anticipates a very gradual recovery and a continued need for belt-tightening,' UPS Airlines President Bob Lekites said in a statement. 'This is a painful decision for our people, but one that is right for the ongoing health of our business.
'But we haven't given up on this process. We continue to go well beyond our contractual obligation to seek a 'win-win' solution to avert furloughs.'
The news comes a week after the Atlanta-based company announced fourth quarter profit tripled to $757 million from the same 2008 period. The international package segment, which relies on UPS Airlines, increased revenue 5.8 percent to $2.79 billion. But for the entire 2009, UPS revenue declined 12 percent, including 14 percent in the international segment. Profits were down more than 29 percent (down 13.5 percent in international).
UPS has taken several steps during the past two years to eliminate $1.4 billion in costs during turbulent economic times, including a freeze on management salaries in 2009, suspension of the company match for 401(k) retirement plans, reduced capital expenditures and retiring older aircraft. One month ago, the company announced it would eliminate 1,800 management and administrative positions to streamline its domestic U.S. small package business. ' Eric Kulisch