UPS extends buyout offer deadline after low driver interest
UPS has extended the deadline for van drivers to apply for a buyout package by two weeks, an indication that the program didn’t meet its target for eliminating jobs.
The integrated parcel carrier initially gave drivers until July 31 to apply for the voluntary separation offer, but the Teamsters union posted on its Facebook page on Friday that “the package giant quietly extended the deadline for its devious driver voluntary severance plan.” A spokesperson for the union declined to provide details, but an individual at a local Teamsters office on the West Coast said UPS (NYSE: UPS) is giving delivery drivers until Aug. 14 to take the buyout.
The person is not authorized to speak with the media and is not being identified to avoid any employer repercussions.
UPS CEO Carol Tomé said on the company’s July 29 earnings conference call that the buyout offer has generated “a lot of interest” so far, but the company has not announced how many people have signed up and whether the package is over or undersubscribed. A UPS spokesperson declined to provide any update on the situation.
About 85% of UPS drivers are at the top end of the pay scale. Those who have 25 to 40 years of service would be the most likely candidates to accept the buyout package, Nando Cesarone, president of the U.S. region and UPS Airlines, told analysts on the call.
UPS is offering $1,800 per year of service, with a minimum payout of $10,000. A driver with 27 years of experience would receive a $48,600 buyout, according to the offer sheet.
It’s unclear if the delay in achieving the job-reduction target will change the timing of the separation dates.
Applicants were told they will be considered for separation dates between Aug. 31 and Oct. 31, depending on the local needs. If the number of applications exceeds eliminated positions, approvals will be granted in order of seniority. Additional applications may be considered for separation dates between Feb. 1 and March 31. The financial package is in addition to earned retirement benefits, including pension and healthcare.
The Teamsters union has vehemently opposed UPS’s buyout plan as a violation of its 2023 master contract, which obligates UPS to create about 30,000 full-time jobs. Union leaders have urged members to decline the voluntary separation package.
The Teamsters argue the separation program violates the union contract because it wasn’t negotiated and any program that changes the terms of employment, such as compensation and separation, must be bargained with the union. Seniority order for buyouts also requires union approval.
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