www.cnbc.com Open in urlscan Pro
23.212.200.33  Public Scan

Form analysis
0 forms found in the DOM

Text Content

Skip Navigation
UPS CEO sells investors on new labor contract as company sees stock slide ahead
of holiday peak
 * watchlive

CREATE FREE ACCOUNT
Markets
 * Pre-Markets
 * U.S. Markets
 * Europe Markets
 * China Markets
 * Asia Markets
 * World Markets
 * Currencies
 * Cryptocurrency
 * Futures & Commodities
 * Bonds
 * Funds & ETFs

Business
 * Economy
 * Finance
 * Health & Science
 * Media
 * Real Estate
 * Energy
 * Climate
 * Transportation
 * Industrials
 * Retail
 * Wealth
 * Life
 * Small Business

Investing
 * Personal Finance
 * Fintech
 * Financial Advisors
 * Options Action
 * ETF Street
 * Buffett Archive
 * Earnings
 * Trader Talk

Tech
 * Cybersecurity
 * Enterprise
 * Internet
 * Media
 * Mobile
 * Social Media
 * CNBC Disruptor 50
 * Tech Guide

Politics
 * White House
 * Policy
 * Defense
 * Congress
 * Equity and Opportunity
 * Europe Politics
 * China Politics
 * Asia Politics
 * World Politics

CNBC TV
 * Live Audio
 * Latest Video
 * Top Video
 * CEO Interviews
 * Europe TV
 * Asia TV
 * CNBC Podcasts
 * Digital Originals

Watchlist
Investing Club
 * Trust Portfolio
 * Analysis
 * Trade Alerts
 * Meeting Videos
 * Homestretch
 * Jim’s Columns
 * Education
 * Subscribe
 * Sign In

PRO
 * Pro News
 * Pro Live
 * Market Forecast
 * Subscribe
 * Sign In



Menu

 * Make It
 * select
   * ALL SELECT
   
   * Credit Cards
     
     
   
   * Loans
     
     
   
   * Banking
     
     
   
   * Mortgages
     
     
   
   * Insurance
     
     
   
   * Credit Monitoring
     
     
   
   * Personal Finance
     
     
   
   * Small Business
     
     
   
   * Taxes
     
     
   
   * Help for Low Credit Scores
     
     
   
   * Investing
     
     
   
   * SELECT
   
   * All Credit Cards
   
   * Find the Credit Card for You
   
   * Best Credit Cards
   
   * Best Rewards Credit Cards
   
   * Best Travel Credit Cards
   
   * Best 0% APR Credit Cards
   
   * Best Balance Transfer Credit Cards
   
   * Best Cash Back Credit Cards
   
   * Best Credit Card Welcome Bonuses
   
   * Best Credit Cards to Build Credit
   
   * SELECT
   
   * All Loans
   
   * Find the Best Personal Loan for You
   
   * Best Personal Loans
   
   * Best Debt Consolidation Loans
   
   * Best Loans to Refinance Credit Card Debt
   
   * Best Loans with Fast Funding
   
   * Best Small Personal Loans
   
   * Best Large Personal Loans
   
   * Best Personal Loans to Apply Online
   
   * Best Student Loan Refinance
   
   * SELECT
   
   * All Banking
   
   * Find the Savings Account for You
   
   * Best High Yield Savings Accounts
   
   * Best Big Bank Savings Accounts
   
   * Best Big Bank Checking Accounts
   
   * Best No Fee Checking Accounts
   
   * No Overdraft Fee Checking Accounts
   
   * Best Checking Account Bonuses
   
   * Best Money Market Accounts
   
   * Best CDs
   
   * Best Credit Unions
   
   * SELECT
   
   * All Mortgages
   
   * Best Mortgages
   
   * Best Mortgages for Small Down Payment
   
   * Best Mortgages for No Down Payment
   
   * Best Mortgages with No Origination Fee
   
   * Best Mortgages for Average Credit Score
   
   * Adjustable Rate Mortgages
   
   * Affording a Mortgage
   
   * SELECT
   
   * All Insurance
   
   * Best Life Insurance
   
   * Best Homeowners Insurance
   
   * Best Renters Insurance
   
   * Best Car Insurance
   
   * Travel Insurance
   
   * SELECT
   
   * All Credit Monitoring
   
   * Best Credit Monitoring Services
   
   * Best Identity Theft Protection
   
   * How to Boost Your Credit Score
   
   * Credit Repair Services
   
   * SELECT
   
   * All Personal Finance
   
   * Best Budgeting Apps
   
   * Best Expense Tracker Apps
   
   * Best Money Transfer Apps
   
   * Best Resale Apps and Sites
   
   * Buy Now Pay Later (BNPL) Apps
   
   * Best Debt Relief
   
   * SELECT
   
   * All Small Business
   
   * Best Small Business Savings Accounts
   
   * Best Small Business Checking Accounts
   
   * Best Credit Cards for Small Business
   
   * Best Small Business Loans
   
   * Best Tax Software for Small Business
   
   * SELECT
   
   * All Taxes
   
   * Best Tax Software
   
   * Best Tax Software for Small Businesses
   
   * Tax Refunds
   
   * SELECT
   
   * All Help for Low Credit Scores
   
   * Best Credit Cards for Bad Credit
   
   * Best Personal Loans for Bad Credit
   
   * Best Debt Consolidation Loans for Bad Credit
   
   * Personal Loans if You Don’t Have Credit
   
   * Best Credit Cards for Building Credit
   
   * Personal Loans for 580 Credit Score or Lower
   
   * Personal Loans for 670 Credit Score or Lower
   
   * Best Mortgages for Bad Credit
   
   * Best Hardship Loans
   
   * How to Boost Your Credit Score
   
   * SELECT
   
   * All Investing
   
   * Best IRA Accounts
   
   * Best Roth IRA Accounts
   
   * Best Investing Apps
   
   * Best Free Stock Trading Platforms
   
   * Best Robo-Advisors
   
   * Index Funds
   
   * Mutual Funds
   
   * ETFs
   
   * Bonds

 * USA
 * INTL

Search quotes, news & videos
Watchlist
SIGN IN
Create free account
UPS CEO sells investors on new labor contract as company sees stock slide ahead
of holiday peak
 * watchlive

CREATE FREE ACCOUNT
Markets
Business
Investing
Tech
Politics
CNBC TV
Watchlist
Investing Club
PRO


Menu


Transportation


UPS CEO SELLS INVESTORS ON NEW LABOR CONTRACT AS COMPANY SEES STOCK SLIDE AHEAD
OF HOLIDAY PEAK

Published Tue, Sep 12 20235:00 AM EDTUpdated Tue, Sep 12 20235:05 AM EDT
Frank Holland@in/frank-holland@FrankCNBC
Cait Freda@in/caitfreda@caitfreda
WATCH LIVE
ShareShare Article via FacebookShare Article via TwitterShare Article via
LinkedInShare Article via Email
Key Points
 * UPS CEO Carol Tome said the new labor deal with the Teamsters will cost less
   than the $30 billion outlined by the union.
 * The company aims to sell the agreement to investors, as its stock has fallen
   since a tentative deal was announced.
 * A Teamsters strike would have been the “costliest in a century,” creating a
   $7 billion hit to the U.S. economy in the first 10 days, according to one
   report.

In this article

 * UPS+0.83 (+0.53%)

Follow your favorite stocksCREATE FREE ACCOUNT
UPS CEO Carol Tome introduces U.S. President Donald Trump for an event at a UPS
facility at Hartsfield-Jackson Atlanta International Airport in Atlanta,
Georgia, U.S., July 15, 2020. 
Jonathan Ernst | Reuters

UPS CEO Carol Tome said the costs incurred by the company for the new Teamsters
contract are less than the ”$30 billion in new money” touted by the union, as
the company aims to sell investors on the agreement.

“It’s not a $30 billion deal,” Tome told CNBC’s Frank Holland in an exclusive
interview on Monday. But Tome declined to reveal the internal projection as the
company released its first presentation to investors outlining the labor
expenses after the bell Monday.



UPS said 46% of the compensation in the deal would be in the first year. Tome
called the agreement cost-effective and fair.

“It’s a barbell structure where it’s heavier in the beginning of the contract.”
Tome said. “We’ll go in the middle of the contract and it steps back down. This
46% of the cost increase happens in the first year, so imagine what the last
four years of the contract are!”

The increases “are really good for us and a 3.3% compounded annual growth rate,”
she added. “That’s a deal we’ll take every day, but it wasn’t just about the
money. We’ve got work/life balance for people, while retaining the ability to
deliver on the weekend, which is really important for our customers.”


AVERTING A CRISIS

The labor contract reached in July prevented a potentially widespread and
disruptive work stoppage. A Teamsters strike would have been the “costliest in a
century,” creating a $7 billion hit to the U.S. economy in the first 10 days,
according to a widely reported estimate from Anderson Economic Group.

It also was another milestone in a summer marked by pushes for massive new
contracts — and even strikes —‎ in industries ranging from airlines and
automaking to television and film. At UPS, full-time drivers will earn up to
$170,000 in pay and benefits in the last year of the contract, while part-time
workers will see their starting pay rise from $16.20 to $21 an hour.‏



Official negotiations between UPS and the Teamsters began in April, as union
leaders urged members to mobilize and create a “show of force it needs to take
on the company.” In June, Teamsters members authorized a UPS strike during the
negotiations. Weeks later, both sides accused the other of walking away from the
contract talks.

In late July, UPS and the Teamsters announced they had reached a tentative
contract agreement. The union ratified the UPS contract on Aug. 25 with record
turnout of 58% of members voting and a record 86% approving the deal.


A ‘WIN-WIN-WIN’

After the tentative deal for the Teamsters contract was reached, Tome called it
a “win-win-win” for the union, customers and the company.

However, UPS shares have fallen more than 14% since the July 25 announcement.
Tome also estimated that UPS lost more than 1 million packages per day in volume
in the weeks leading up to the eventual deal.

“We can grow now that we have certainty,” Tome said. “Because we know what our
labor costs are over the next five years, we can put together plans to mitigate
that cost, plans to drive productivity inside of our business through
automation, which, oh by the way, we retained the ability to do so.”

Tome said the win for customers, as the holiday-shipping peak approaches, is the
most important part of the deal. U.S. holiday e-commerce sales are expected to
increase by 1% year over year to $273 billion, according to a recent forecast
from Salesforce.


UPS SHIFTS TO MODERNIZATION STRATEGY

Tome said the Teamsters negotiation was another test of her leadership, rivaling
the challenge of becoming CEO of UPS in June 2020 at the height of the Covid-19
pandemic and the beginning of an unprecedented surge in e-commerce.

“We actually started thinking about this contract negotiation the day I
onboarded. Where the industry was going, what we needed to survive. We started
thinking about this as a strategic imperative,” Tome said.

With the Teamsters contract done, Tome said she is focused on her “Better and
Bolder” strategy, the next phase of her initial “Better not Bigger” philosophy
which focused on modernizing and maximizing profits at the more than
115-year-old shipping and logistics giant. The “better” part seeks higher margin
volume as well as increasing worker and facility productivity, while the
“bolder” initiative involves using automation, artificial intelligence and other
innovation to capture more business.

“In terms of generative AI, where we can really use this technology is to
improve the customer experience,” Tome said. “We have over 12,000 people in our
customer care centers around the world, each of them trying to interact with a
customer who may have an issue. Think about how it will be when we have a ‘bot’
involved learning from that experience and sharing that learned experience
around the world. Not only will it drive productivity but it will give better
customer experience.”


Trending Now

 1. 31-year-old mom’s ‘simple’ side hustle brings in up to $101,000 a month—off
    30 minutes of work a day
    
 2. My 95-year-old grandfather is a former cardiologist—his 8 ‘non-negotiables’
    for a long, happy life
    
 3. Delta will make it harder to get into airport lounges, changes rules to earn
    elite status
    
 4. I spent $2,580 to see Beyoncé, and it changed my outlook on life—a
    psychology expert explains why
    
 5. Arm prices IPO at $51 per share, valuing company at over $54 billion
    




 * Subscribe to CNBC PRO
 * Licensing & Reprints
 * CNBC Councils
 * Supply Chain Values
 * CNBC on Peacock
 * Join the CNBC Panel
 * Digital Products
 * News Releases
 * Closed Captioning
 * Corrections
 * About CNBC
 * Internships
 * Site Map
 * Cookie Preferences
 * Careers
 * Help
 * Contact

 * 
 * 
 * 
 * 
 * 
 * 
 * 

NEWS TIPS

Got a confidential news tip? We want to hear from you.

Get In Touch

ADVERTISE WITH US

Please Contact Us

CNBC NEWSLETTERS

Sign up for free newsletters and get more CNBC delivered to your inbox

Sign Up Now

Get this delivered to your inbox, and more info about our products and
services. 

Privacy Policy|Do Not Sell My Personal Information|CA Notice|New Terms of
Service (Updated August 24, 2023)

© 2023 CNBC LLC. All Rights Reserved. A Division of NBCUniversal

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global
Business and Financial News, Stock Quotes, and Market Data and Analysis.

Market Data Terms of Use and Disclaimers

Data also provided by




We and our partners collect information from your device, such as device
identifiers, IP address, and your browser type to personalize and deliver
content, marketing and advertising—across devices and platforms; for analytics
and measurement, so we can improve our services and develop new ones; to match
and combine offline data with your online activity; and for social features. We
share this information with selected partners with your consent. By clicking “I
Accept”, you consent to our use of these Cookies. Click Manage Choices to learn
more about these. We will also use other Cookies that are essential for our site
and Services, including for security and fraud prevention. To learn more about
some of our partners select IAB and Google Vendors. You can adjust your
preferences at any time via the “Cookie Preferences” link in the footer of
relevant NBCUniversal websites or in-app settings. Visit our Cookie Notice and
Privacy Policy to learn more.


WE AND OUR PARTNERS PROCESS DATA TO PROVIDE:

Store and/or access information on a device. Personalised ads, and ad
measurement. Personalised content, content measurement, audience insights, and
product development. IAB and Google Vendors

I Accept Reject All Manage Choices



PRIVACY SETTINGS




 * YOUR PRIVACY


 * STRICTLY NECESSARY COOKIES


 * ENSURE SECURITY, PREVENT FRAUD, AND DEBUG


 * TECHNICALLY DELIVER ADS OR CONTENT


 * PERSONALISED ADS, AND AD MEASUREMENT


 * STORE AND/OR ACCESS INFORMATION ON A DEVICE


 * PERSONALISED CONTENT, CONTENT MEASUREMENT, AUDIENCE INSIGHTS, AND PRODUCT
   DEVELOPMENT


 * SOCIAL MEDIA COOKIES

YOUR PRIVACY

We and our partners collect information from your device, such as device
identifiers, IP address, and your browser type to personalize and deliver
content, marketing and advertising—across devices and platforms; for analytics
and measurement, so we can improve our services and develop new ones; to match
and combine offline data with your online activity; and for social features. We
share this information with selected partners with your consent. By clicking
“Allow All”, you consent to our use of these Cookies. Click on the Cookie
categories or the “Detailed purpose descriptions” below to learn more about
these. We will also use other Cookies that are essential for our site and
Services, including for security and fraud prevention. To learn more about some
of our partners, see the IAB and Google Vendors under each purpose below. Visit
our Cookie Notice and Privacy Policy to learn more.

IAB and Google Vendors‎

STRICTLY NECESSARY COOKIES

Always Active

These Cookies are required for Service functionality, including security and
fraud prevention, and to enable any purchasing capabilities. You can set your
browser to block these Cookies, but some parts of the site may not function
properly.

Cookies Used‎

ENSURE SECURITY, PREVENT FRAUD, AND DEBUG

Always Active

Your data can be used to monitor for and prevent fraudulent activity, and ensure
systems and processes work properly and securely.

IAB and Google Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab

TECHNICALLY DELIVER ADS OR CONTENT

Always Active

Your device can receive and send information that allows you to see and interact
with ads and content.

IAB and Google Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab

PERSONALISED ADS, AND AD MEASUREMENT

Personalised ads, and ad measurement


 * SELECT BASIC ADS
   
   Switch Label
   
   Ads can be shown to you based on the content you’re viewing, the app you’re
   using, your approximate location, or your device type.

 * CREATE A PERSONALISED ADS PROFILE
   
   Switch Label
   
   A profile can be built about you and your interests to show you personalised
   ads that are relevant to you.

 * SELECT PERSONALISED ADS
   
   Switch Label
   
   Personalised ads can be shown to you based on a profile about you.

 * MEASURE AD PERFORMANCE
   
   Switch Label
   
   The performance and effectiveness of ads that you see or interact with can be
   measured.

 * TARGETED ADVERTISING COOKIES
   
   Switch Label
   
   These Cookies are used to collect data about your browsing habits, use of the
   Services, your preferences, and your interaction with advertisements across
   platforms and devices for the purpose of delivering targeted advertising
   content, both on our Services and on third party sites. Third-party sites and
   services also use Targeting Cookies to deliver content, including
   advertisements relevant to your interests on the Services. If you reject
   these Cookies, you will see less relevant advertising.

IAB and Google Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab
Cookies Used‎

STORE AND/OR ACCESS INFORMATION ON A DEVICE

Store and/or access information on a device


Cookies, device identifiers, or other information can be stored or accessed on
your device for the purposes presented to you.

IAB and Google Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab
Cookies Used‎

PERSONALISED CONTENT, CONTENT MEASUREMENT, AUDIENCE INSIGHTS, AND PRODUCT
DEVELOPMENT

Personalised content, content measurement, audience insights, and product
development


 * CREATE A PERSONALISED CONTENT PROFILE
   
   Switch Label
   
   A profile can be built about you and your interests to show you personalised
   content that is relevant to you.

 * SELECT PERSONALISED CONTENT
   
   Switch Label
   
   Personalised content can be shown to you based on a profile about you.

 * MEASURE CONTENT PERFORMANCE
   
   Switch Label
   
   The performance and effectiveness of content that you see or interact with
   can be measured.

 * APPLY MARKET RESEARCH TO GENERATE AUDIENCE INSIGHTS
   
   Switch Label
   
   Market research can be used to learn more about the audiences who visit
   sites/apps and view ads.

 * DEVELOP AND IMPROVE PRODUCTS
   
   Switch Label
   
   Your data can be used to improve existing systems and software, and to
   develop new products

 * CONTENT SELECTION COOKIES
   
   Switch Label
   
   This group is so Content Selection IAB group can have an id

IAB and Google Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab
Cookies Used‎

SOCIAL MEDIA COOKIES

Social Media Cookies


These Cookies are set by social media platforms on the Services to enable you to
share content with your friends and networks. Social media platforms have the
ability to track your online activity outside of the Services. This may impact
the content and messages you see on other websites you visit.

Cookies Used‎
Back Button


COOKIE LIST

Filter Button
Consent Leg.Interest
checkbox label label
checkbox label label
checkbox label label

Clear
checkbox label label
Apply Cancel
Save Settings
Allow All