UPS Strike Continues

ELIZABETH FARNSWORTH: First tonight, what's driving the UPS strike. Betty Ann Bowser begins our report.

BETTY ANN BOWSER: On picket lines from Maine to California the first five days of the UPS strike have been marked by growing tension.

SPOKESMAN: This is a picket line. You don't need to break it. You can call in sick. There's no reason to be here.

BETTY ANN BOWSER: Representatives of the 185,000 striking Teamsters tried to keep non-union employees from crossing picket lines to go to work. And when they did in suburban Boston, 11 wee arrested, handcuffed, and sent to jail. In Chicago Teamsters marched and chanted into the night. And in Denver, they heckled anyone and everyone who tried to drive through their picket line.

Nationwide businesses that depend on UPS to move their products reported disruption and inconvenience. Analysts say if the strike continues through Labor Day, some companies will face huge economic losses. All over the country businesses had a hard time finding alternatives to UPS. Federal Express is more expensive. Airborne, the post office, and other services are overbooked. Some are limiting the number of packages they will take. Because there aren't many alternatives, the Colorado Saddlery Company isn't moving any of its stock and trade: Handmade saddles, ranging in price from $800 to $1200.

They're too big for the post office to ship and too expensive for any other form of transportation. The only product the company is moving right now are small packages of bridle and saddle parts. And now one comes to pick their packages up. Employees have to load them and take them to the post office themselves. Shipping manager Rita Weber says she finds all of this frustrating as her customers do.

RITA WEBER, Colorado Saddlery Company: We've got a reputation that we ship on time. As you know, this summer is coming to a close, and these people would like to ride their saddles a few times before the snow flies because 90 percent of our saddles go up to Wyoming, Montana, and over into the West, where it snows already like middle of September or maybe even the first of September.

SPOKESPERSON: We have a variety of sizes, from the little-

BETTY ANN BOWSER: But the UPS strike means more than inconvenience to small businesswoman Penelope North. She runs a $1/4 million gourmet jelly company. For the past eight years she has not turned a profit. 1997 was supposed to be the year she operated in the black for the first time. Then came the strike and an estimated daily loss of $1200. And in her case if customers don't get what they've ordered on time, they cancel.

BETTY ANN BOWSER: And what happens to you if you can't get this out and get it to your customer?

PENELOPE NORTH, Penelope's of Evergreen: Then I've lost the sale, and it's a $400 sale. So I've lost the sale on this one. This one over here has a cutoff date of the 18th as well. I can't go much longer. I mean, I personally thought that it would be two days, maybe three at the most, but the problem is cash flow, of course.

We have orders that we shipped out prior to the strike that our customers haven't received, so that money is not going to come in. The customers have 30 days to pay. They're not going to pray until they get the product. We're not--we have shipped nothing out this entire week. So we will not have any income to come in-

BETTY ANN BOWSER: Ten days. Could you go on with this for 10 days?

PENELOPE NORTH: Oh, if it goes 10 days, I'm really going to be stressed out.

BETTY ANN BOWSER: But at one Denver-based company, Bolle America, 90 percent of its French-made, upscale sunglasses, sport goggles, and eye wear parts are still moving, with the help of UPS managerial personnel who stop by to ship the company's packages. This U.S. distribution center for Bolle spends about $400,000 a year with UPS. But Bolle is finding it expensive to move the other 10 percent of its stock, and manager Mike Shoemanker says in the end the cost will be passed on to the public.

MIKE SHOEMANKER, Bolle America: Ultimately, I think the end consumer is the one that is going to suffer out of this whole situation because Federal Express costs more for me to use than UPS. That eventually is going to get passed along to the consumer.

BETTY ANN BOWSER: Do you think that's fair?

MIKE SHOEMANKER: Well, when you have a situation like this that the Teamsters have decided to take this action, they're not striking against UPS only. This is really striking against everybody because of the size of UPS.

BETTY ANN BOWSER: What do you mean?

MIKE SHOEMANKER: Well, UPS handles like 80 percent of the packages in the United States. And because of that volume, it affects everybody. And, ultimately, every consumer in the United States is going to end up paying in part for this strike.

BETTY ANN BOWSER: By week's end, the same issues that initiated this strike remained unresolved. A key point is part-time employment. The union wants UPS to open up more full-time positions for thousands of part-time employees. Currently, full-time employees earn an average of $50,000 a year and get an estimated $20,000 in benefits. UPS drivers are the highest paid in the industry.

Part-time employees, who make up more than half the company's work force, earn an average of $11 an hour, or about $38,000 a year, but they also get benefits. In what UPS officials said was their best and last offer, the company promised to create 1,000 new full-time positions, but the union rejected the offer, saying 10,000 of its members are, in effect, full-time workers already, without full-time pay, because they put in 35 hours or more a week. In Denver, part-time loader Rada Shockley says even if more full-time jobs were created, it takes years before UPS employees like her are able to move into them.

RADA SHOCKLEY, Teamster: I would like to make more money. I would like to be offered a full-time job because right now I'm working part-time with UPS, and then I have a full-time job. You know, that's kind of hard on you because I'm working 5 to 9 and then midnight to 8:30. You know, they don't give us this opportunity, so if we want full-time we can take it, so we don't have to work two jobs or twelve hours a day.

BETTY ANN BOWSER: UPS says it will increase the starting wage of part-time employees in the new contract. And on the NewsHour earlier this week company spokesman David Murray said it's not devaluing full-time employment.

DAVID MURRAY, UPS Negotiator: UPS has not shifted work heretofore done by full-timers to part-timers. The fact of the matter is, there's a whole lot of part-timers who only want part-time work. Now, there are people who do want to go to full-time jobs. We have the greatest full-time jobs in the country. We also have pretty good part-time jobs. You hear a lot about the $8 rate. That's the entry level rate. Part-timers with five years or more average almost $14 an hour.

BETTY ANN BOWSER: The other unresolved issue is who will run the pension fund for UPS employees. Currently, UPS contributes over a billion for its union workers to the Teamsters pension fund, making it the largest contributor. The company says if it had control over how that money was invested, employees would have a better nest egg when they retire. The Teamsters oppose a UPS pullout, saying the union can do a better job of managing UPS employees' money.

So far, President Clinton has refused to intervene in the strike, but pressure is mounting. Penelope North has added her small gourmet food business to a growing list of retail giants, including Saks Fifth Avenue, Sears, Toys R Us, and Circuit City. The companies have written the President, telling him a prolonged strike will irreparably harm the country's robust economy.

Editor's note: This NewsHour segment reported that part-time workers at UPS average $11 an hour or $38,000 a year. That was wrong. Most earn about $16,000 a year plus benefits. Some who work more hours earn up to $20,000 a year.