UPS mechanics reject new pay rise contract

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NEW YORK, March 26 (Reuters) - United Parcel Service Inc (UPS) said on
Tuesday some of its aircraft mechanics voted to reject a contract that would
have raised their top hourly pay by 30 percent.

Teamsters Local 2727, which represents workers at UPS's main U.S. air hub in
Louisville, Kentucky, said 83 percent of 1,076 ballots returned on Friday
voted against the proposal, saying the pay wasn't generous enough.

UPS said the contract, negotiated with Teamsters management in December,
would have made its mechanics the highest-paid in the industry. "We were
surprised and disappointed the contract was rejected, but we are confident
we will reach a deal in the not-too-distant future," said UPS spokesman Mark
Giuffre.

The proposal would have raised pay for mechanics at the top scale to $40 an
hour in 2004, up from $30.67 an hour. New mechanics would earn $17 an hour
until they qualify for the top pay bracket, after five years of employment.


UPS and Local 2727 will resume contract talks in early April with a federal
mediator. UPS aircraft mechanics have never gone on strike, Local 2727
general secretary Jack Chatburn said.

Both sides said the mechanics' vote would not impact negotiations for a new
national contract between UPS and the Teamsters union, which represents
about 220,000 of the 371,000 UPS employees outside the airline division.

These talks are working towards a July 31 deadline, when Chatburn said
"there's a pretty good chance (UPS ground staff) will either get the deal
they want, or they will go on strike."

Earlier this month, United Airlines mechanics voted to approve a new
five-year contract after more than two years of negotiations.

UPS shares were down 42 cents at $60.22 in mid-day New York Stock Exchange
trade.


©2002 Reuters Limited.

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