UPS Furloughs Pilots; Implements Cost Cuts and Streamlining

By wmadministrator


UPS has announced plans to furlough at least 300 of its airline pilots, but at the same time said it would continue its effort to find a solution with the pilots’ union that would avert or mitigate the layoffs before they take effect. The company employs approximately 2,800 pilots.

UPS has been working with its union, the Independent Pilots Association, for the past year to identify ways to cut operating costs to avoid pilot furloughs.

Last June, the IPA identified significant savings through voluntary programs such as pilots taking short- and long-term leaves of absence, military leaves, job sharing, reduction in flight pay guarantees, early retirement, and sick bank contributions. UPS subsequently agreed it would not furlough any pilots in 2009.
The two sides have been working together since then to identify additional cost-cutting initiatives that would eliminate the threat of layoffs entirely. However, the company said those discussions have failed to identify sufficient operating savings.

If the furloughs go forward, they will be phased in, with the first 170 pilots receiving notices in 2010. The initial group would be furloughed in May.

“Even though the economy has begun to turn around, UPS anticipates a very gradual recovery and a continued need for belt-tightening,” said UPS Airlines President Bob Lekites. “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 company has already implemented a number of measures in its effort to contain costs, including a freeze on management salaries in 2009, suspension of the match for 401(k) plans, trimming capital expenditures and retiring older aircraft. Most recently, the company announced that it would be streamlining its entire domestic United States small package structure, eliminating 1,800 management and administrative positions.UPS has announced plans to furlough at least 300 of its airline pilots, but at the same time said it would continue its effort to find a solution with the pilots’ union that would avert or mitigate the layoffs before they take effect. The company employs approximately 2,800 pilots.

UPS has been working with its union, the Independent Pilots Association, for the past year to identify ways to cut operating costs to avoid pilot furloughs.

Last June, the IPA identified significant savings through voluntary programs such as pilots taking short- and long-term leaves of absence, military leaves, job sharing, reduction in flight pay guarantees, early retirement, and sick bank contributions. UPS subsequently agreed it would not furlough any pilots in 2009.
The two sides have been working together since then to identify additional cost-cutting initiatives that would eliminate the threat of layoffs entirely. However, the company said those discussions have failed to identify sufficient operating savings.

If the furloughs go forward, they will be phased in, with the first 170 pilots receiving notices in 2010. The initial group would be furloughed in May.

“Even though the economy has begun to turn around, UPS anticipates a very gradual recovery and a continued need for belt-tightening,” said UPS Airlines President Bob Lekites. “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 company has already implemented a number of measures in its effort to contain costs, including a freeze on management salaries in 2009, suspension of the match for 401(k) plans, trimming capital expenditures and retiring older aircraft. Most recently, the company announced that it would be streamlining its entire domestic United States small package structure, eliminating 1,800 management and administrative positions.

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