Ron Carey's Weird Strike

As published in The Wall Street Journal -- August 14, 1997

The UPS strike is so weird it’s hard to know where to begin. Somehow we’re supposed to believe that the mighty Teamsters, after signing a contract with the very same company in 1993, has suddenly decided it must paralyze the nation’s parcel-distribution system to have it out over mostly voluntary part-timers and various pension arcana. These matters may be worth an argument, but Armageddon?

In fact, the closer one looks at the details unfolding, the weirder and more improbable the whole thing looks. Consider:

The fellow who called this massive strike, Ron Carey, has not even been ratified as president of this union by the federal referee appointed to monitor the integrity of the Teamsters’ recent election. Indeed, the Teamsters union was such a mess that the Department of Justice spent a whopping $23 million to oversee a single presidential election. His opponent is formally disputing Mr. Carey’s narrow victory, but the Reno Justice Department waved him into office without waiting for the federal referee to formally validate the Carey presidency.

Next thing, "President" Carey is embroiled in the Democratic party’s fundraising scandal. In June, the Justice Department charged his main election consultant, Martin Davis, with funneling embezzled Teamsters money into the Carey campaign. Then came questions about whether a quid pro quo existed for money and help flowing between the Teamster/Carey campaign and Democratic state races. With all this spilling onto the table, Senator Fred Thompson’s committee announced it would include the Teamsters in its campaign-finance investigation.

Next thing we know, Ron Carey has shut down United Parcel Service. More, he leads the company’s members into the streets while simultaneously telling them they can’t vote on the company’s proposals.

Alas, the Teamsters’ cash position isn’t quite up to taking such a flyer; with $98 million in assets and $81 million in liabilities, the union has $17 million in cash to support a strike whose cost is estimated to be $10 million a week. Gosh, where do we go from here?

You call in Big Brother. So on Tuesday, President John Sweeney of the AFL-CIO announces his giant organization will let the Teamsters borrow the money from them. Whatever "borrow" may mean, the Sweeney spectacle is especially rich. Here is a group that was able to spend $35 million bashing Republicans with high-priced TV commercials in the last presidential election in large part because its candidate, Bill Clinton, decided he didn’t care to enforce the 1988 Supreme Court Beck decision, which ruled that union members couldn’t be forced to make involuntary dues contributions for political activity. Money being fungible, this means a fair amount of illegal dues money is now propping up Ron Carey’s strike.

But our dramatis personae isn’t yet complete. The logical person to which all heads turn for help, however informal, is the Secretary of Labor, who happens to be Alexis Herman. Ms. Herman came over to Labor from the White House office of public liaison, after surviving charges that she was a player there in the Clinton donor coffees. The former public-liaison chief, who from 1989 to 1991 was Ron Brown’s chief of staff at the Democratic National Committee, stoutly denied any such fundraising role. Well whatever Ms. Herman was doing at the White House, we doubt it sent her over to Labor to stiff Ron Carey, who transformed the Teamsters from a politically diverse organization into a wholly committed adjunct of the Clinton enterprise.

UPS must feel it’s fallen down the rabbit hole. Here’s a company that’s about as close as it gets to being a model corporate citizen (handing out money to the NAACP and the like and, incredibly, not bragging about it), and suddenly it finds itself in the middle of a 1950s-style labor war. With every passing day, reporters are developing more fascinating detail about the particulars, such as Laura Jereski’s report yesterday in the Journal that UPS today would pay a mind-boggling $700 million to prop up the Teamsters’ multiemployer plans, by way of avoiding a $2 billion exit fee in five years.

So what’s this weird, awful strike about, anyway? Surely not pensions and part-timers. Watching the drama, one mainly sees union leaders on life support from a flouted Supreme Court decision, arguing to their members that an offer to increase pension payouts by 50% is junk and, in short, incapable of adjusting to a modern economy that is roaring forward with or without them. Whatever general good will exists for the union movement, this strike is likely to fritter it away.

Oh, one more thing. We agree that Bill Clinton shouldn’t intervene. Offering to solve the baseball strike was quite enough.

As printed in the Wall Street Journal, Thursday, August 14, 1997
Copyright © 1997 Dow Jones & Company, Inc. All Rights Reserved.

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