Next for US unions: Big contracts for 700,000 workers

New York
CNN business

The 11th-hour deal that averted a crippling strike on the nation’s freight railroads is the biggest victory for US unions in years.

The deal reached early Thursday kept more than 50,000 engineers and managers on the job and won members the labor rule changes their management had demanded. They got it too an immediate 14% raise, retroactive pay in 2020 and a total of 24% raises over the five-year duration of the contracts.

It also showed the power that unions can still hold, especially when a strike threatens to fight a a body blow to the nation’s supply chain and economy. The railroad will continue to operate while more than 100,000 union members vote on whether or not to ratify the interim agreements in the coming weeks. Many votes, including those of engineers and directors, have yet to be scheduled.

As for the big US job contracts, this is just the beginning.

Nationwide there are an additional 700,000 union members in key industries who could win new labor agreements next year, possibly after a strike.

Each of these unions seeks not only favorable contracts, but also important changes in labor rules and guarantees of job security, which can make it difficult to avoid work stoppages.

Here are some of the most crucial upcoming negotiations:

About 350,000 UPS Teamsters are covered by a labor contract that expires at the end of July 2023. If the union goes on strike, it could be the largest walkout ever at a single U.S. business.

A majority of the Teamsters rejected UPS’s last contract in 2018, but then-union president James Hoffa was able to agree to the offer because there wasn’t enough voter turnout to trigger a strike.

An Sean O’Brien, a Hoffa critic, was elected the union’s new president earlier this year. O’Brien made the UPS contract a key issue in his campaign for labor, and with UPS having just hit record annual profits, he vowed to pay more and improve working conditions for members.

O’Brien often talks about the union’s $300 million strike fund, which it has amassed to pay members in the event of a work stoppage.

“Do our members wake up every day wanting to strike? I would say no. But are they fed up? Yes, they’re fed up,” O’Brien told CNN Business earlier this month. “Whether there’s a strike or not, that’s entirely up to the company. We’re going to use as much leverage as we can to get the contract that our members deserve.”

UPS said it was hopeful the two sides could reach an agreement and avoid the company’s first national strike since 1997. And the workforce has been increasing, including 72,000 new ones union members – since the start of the pandemic, even as other unionized employers have been laying off workers.

“We want a contract that provides benefits to our employees and gives UPS the flexibility to remain competitive in a rapidly changing industry,” the company said this month. “We believe we will continue to find common ground with the Teamsters and reach an agreement that is good for everyone involved.”

If the union goes on strike, be prepared for major supply chain disruptions and a body blow to the economy. UPS estimates that it carries about 6% of US gross domestic product, the broadest measure of the nation’s economic activity. With fears of a recession mounting, the pressure will be immense on the union and management to reach an agreement.

UPS Teamster drivers and package sorters are governed by a different labor law than the railroads, so the government does not have the same authority to prevent a strike as it does with railroad workers.

Airlines are the nation’s most unionized industry, and those unions are among the most powerful. Nearly 200,000 airline union members have been months, and in some cases years, since their last raise.

With carriers once again delivering high revenues and profits, unions are eager to recoup some of that revenue. All the carriers acknowledged in their comments to investors that they expect wages to rise significantly.

And as with rail unions, members are focused on staff shortages and scheduling problems, which they say have led many workers to strike.

Airlines are subject to the same labor laws as railroads, meaning that agreements do not expire at a specific time. They become “admirable”. when they reach the end of their terms, and if no contract is reached, the existing agreement remains in effect until a new one is hammered out.

Members can strike, or lockout management, only after a 60-day cooling-off period when federal mediators declare an impasse in talks. During this period, a presidential panel makes recommendations.

If a strike or lockout begins, it will end when both sides reach an agreement or Congress intervenes. Companies bargain with their unions, so a strike would blow up just one carrier, but that would also be a nightmare for the traveling public.

As a result, the management of the union does not know when their members can get new contracts. Some have been waiting since 2019.

“Air travel is back… I think the time is right [for new contracts]”said Greg Regan, president of the AFL-CIO’s Transportation Trades Division. “Workers will demand better wages and better working conditions. But it’s hard to tell about timing.”

It’s not just passenger airlines that could win contracts in the coming year. FedEx (FDX) is primarily non-union, but its pilots are unionized and their contract changed nearly a year ago. And shortly after the expiration of the Teamsters contract for UPS ground workers, the contracts of UPS pilots and aircraft mechanics are subject to change.

Agreements for about 150,000 United Auto Workers created by the merger of General Motors ( GM ), Ford ( F ) and Stellantis, Fiat Chrysler and Peugeot’s PSA Group will expire next year.

GM workers, angered by plant closings, won the latest round of contracts after a six-week strike in September and October 2019, months before the pandemic.

No factory has been closed since then. In fact, automakers have invested tens of billions of dollars to build new power stations or to transform old ones from conventional gas-powered cars to electric vehicles.

But the shift to EVs could complicate upcoming conversations.

It takes about 30% less labor to build an EV than a traditional car or truck because fewer parts are needed to build them.

That’s the main concern of the unions whose members build engines and transmissions. Earlier this month, more than 1,000 UAW workers at the Stellantis foundry in Kokomo, Ind., walked out over a weekend over “local issues,” allowing them to strike without causing a company-wide shutdown. Stellantis quickly established itself, as parts of these plants keep its other factories running.

But that solution didn’t address the looming question of what the switch to EVs will mean for union workers.

Much of the work that goes into building an EV goes into the large batteries that power those vehicles. Automakers are rushing to build EV battery factories, almost all partnering with battery manufacturers. In fact, Stellantis is building a battery plant in Kokomo together with Samsung. So far, none of these factories have guaranteed that union members will have workers.

That’s sure to be a a hot topic in upcoming job interviews, according to Bernard Swiecki, director of research at the Automotive Research Center, a Michigan think tank. “The shift to planned EVs is a big issue out there,” he said.

Swiecki imagines the UAW will want to press the issue in this round of discussions, rather than wait until the shift to EVs is more advanced.

“The unionization of the EV battery factories makes this probably the most interesting set of negotiations since the bankruptcy,” Swiecki said, referring to the 2009 reorganizations of GM and Chryser and the new deals that followed for all automakers.