“That was the beginning of the end for the fund. That was a totally irresponsible thing to do,” Dunkerley says of letting UPS out. “That money is gone in investment losses. They've lost more than $6 billion since 2007.”
Munroe said in the past that the agreement with UPS was a necessary compromise that has worked out positively for both UPS and the union.
But Ken Paff, a Teamsters member and head of Teamsters for a Democratic Union, a group critical of current union leadership, agrees with Dunkerley. “UPS is the largest, most profitable, and a growing employer, exactly what you want in a pension plan,” Paff says. “Letting UPS out would be like Blue Cross saying they wanted all of the healthy young people out of its plan.”
The fund lost almost $1 billion in 2009 and the Teamsters expect it to lose even more in 2010. The Pension Benefit Guaranty Corporation (PBGC), a government entity that protects and rates more than 29,000 private pension plans, including Central States, has rated the fund's status as critical since 2008.
Less than four months after the union received the $6.1 billion from UPS, the PBGC first rated the fund as being in the “red zone,” its lowest rating.
The UPS affair has led to more companies attempting to withdraw, saying that the UPS freight division can charge less for services because they are not paying into the fund. Because of this, the union has faced more challenges.
In September, the nation's largest trucking company, YRC Worldwide, successfully negotiated a temporary withdrawal from the fund that will last until the end of 2010. Because YRC was able to withdraw, America's third largest trucking company, ABF Freight Systems, also wishes to stop contributing, saying it can no longer compete with YRC.
YRC bought Dunkerley's company, Holland Motor Express, last year. A slender man with just a wisp of red hair, Dunkerley seems quiet and reserved. But his green eyes flash when discussing the deals with UPS and YRC. He does not believe YRC will ever pay “one more dollar” into the fund.
“This is all in the self-interest of the leadership, not in the interest of the union, because [after the vote] they negotiated a sub-standard contract,” Dunkerley says. “The union stood with the company, telling everyone to take the agreement because all they care about is their dues money.”
Which all comes back to health care reform. The Teamsters favor reform because it could be a large component of fixing organized labor. “Not having to pay health care costs and not requiring companies to pay health care costs would make a huge difference for all unions in this country,” Revitte says.