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ATLANTA — UPS Inc. won't furlough any of its pilots for at least 10 months, after the union reached a deal with the world's largest shipping carrier that includes more than two-thirds of the cost cuts the company wanted.
The Atlanta-based company said Monday the Independent Pilots Association has identified savings totaling roughly $90 million over three years through pilots taking short- and long-term leaves of absence, military leaves, job sharing, reductions in flight pay guarantees, early retirement, and sick bank contributions.
UPS wanted $131 million in pilot savings over the next three years to avoid furloughing, or idling, roughly 300 pilots. That's 10 percent of the 3,000 pilots represented by the union. Generally, pilots who are furloughed can be recalled to duty under certain circumstances.
UPS had been seeking $40 million in pilot cost savings for 2009, $38 million for 2010 and $53 million in 2011.
In a joint statement, the company and union said that although the company's full goal was not reached by last week's deadline, the two sides have agreed there will be no furloughs through April 1, 2010, and that the IPA will continue to work this year to produce additional savings.
"Voluntary pilot savings generated later this year could eliminate the proposed layoffs entirely," the statement said.
Rank-and-file pilots will not vote on the cost cuts because they are part of a voluntary initiative the pilots agreed to take part in, according to the union.
The company said the severe downturn in the global economy has caused UPS package and freight volumes to decline.
UPS, also known as United Parcel Service, has trimmed over $1 billion from its budget by freezing management salaries, suspending matches for its 401(k) plans, cutting capital expenditures, restructuring package operations in some locations, and a series of other activities, according to the company.
