UPS workers accrue bundles of wealth

Stock: Some employees have seen their company stock value nearly triple since the debut Wednesday of the delivery service on Wall Street.

November 14, 1999|By Lisa Respers and Liz Atwood | Lisa Respers and Liz Atwood,SUN STAFF

Eric Montz is kicking himself right about now.

The 27-year-old United Parcel Service driver from Catonsville opted to focus his attention -- and money -- on his 401(k) retirement fund rather than buying company stock.

"It seems like every customer I have is saying, `Oh, here comes the millionaire,' or `Do you have UPS stock?' " said Montz as he made deliveries in downtown Baltimore days after the company's initial public offering became Wall Street's hottest stock.

"I wish I did," he said. "So many people are talking about it that it's annoying."

Thousands of other workers at the 92-year-old Atlanta-based company are anything but annoyed. They've seen their stock nearly triple since 109.4 million shares were offered to the public Wednesday. The stock -- valued at $25.50 a share before the public offering -- closed at $70.13 Friday.

Long before UPS announced in July its plan to go public, many employees had invested heavily in company stock, some telling fellow workers they had taken second mortgages on their homes to buy shares. This week, speculation spread quickly throughout the company about who had made what. But many were keeping their newfound wealth a secret, even from their closest friends.

"I made about $700,000," said a driver who has worked for the company for more than 30 years and asked not to be identified. "I'm not too excited about it right now because it's all on paper, but maybe my kids can do something with it."

Under Securities and Exchange Commission regulations, UPS stockholders are not allowed to sell shares for six months. Selling could mean hefty capital gains taxes and early-withdrawal penalties for those with company stock in retirement plans.

In the meantime, the public offering has turned some employees, including tractor-trailer driver Frank Barron, into amateur analysts who will be watching the price of UPS stock as it is traded on the New York Stock Exchange.

Barron, who works out of the UPS facility on Joh Avenue, said he spent his day off Wednesday watching television reports about the first day of trading.

"I was about ready to call down to the job and say, `You guys still have to work, so quit partying,' " said Barron who added that he had made a "good return" on the stock he had amassed after 15 years with the company.

"Since I started working here in 1984, I know people who have been saying they wish they could buy UPS stock, so I wasn't surprised when it did well," he said.

UPS, the world's largest express carrier and package-delivery company, operates in more than 200 countries and territories, delivering more than 12 million packages each business day. UPS' debut was the largest-ever initial public stock offering.

UPS said it will use money from the stock offering for acquisitions to keep up with deliveries from an expected surge in online sales. The company delivers more than half the goods ordered over the Internet, said Chairman and Chief Executive Officer James W. Kelly.

About a third of the company's 330,000 workers worldwide own shares. The public offering meant an average gain of more than $373,000 per worker, but most went to managers, who have received stock since 1927.

Most of the drivers of the familiar brown trucks didn't get rich. Like other hourly employees, they have been able to buy stock in the company only for the past four years.

Some held a couple of thousand dollars' worth, and many said they didn't own stock at all.

"A lot of us didn't think as much about [the stock purchase plan] before this," said Joe Zill, a package handler. "Now they are all wishing they had bought."

But even those like John Liupaeter, who saw the value of his stock increase only by several thousand dollars, were pleased.

UPS stock "is definitely going to be in my portfolio," said Liupaeter, who has been a UPS driver for 15 years.

Employees were elated, but there were no champagne celebrations, said Denis Taylor, president of Teamsters Local 355. "This is not a champagne crowd," he said.

Company employees received stock in several ways. In 1995, a thrift plan for hourly employees was discontinued and workers were given the option of converting their savings to company stock. Since then, they have also been able to purchase stock through payroll deductions.

"Some of them have some pretty hefty sums," Taylor said.

Managers and other nonunion workers could purchase stock through the company's 401(k) savings plan. Managers were also given stock as annual performance bonuses, and top officials received stock options

A 22-year veteran of the company who began his career at UPS washing trucks said he began acquiring company stock through his compensation plan after becoming a manager 13 years ago. This week, his net worth increased by "hundreds of thousands of dollars," he said.

"You see people who thought they'd work their whole life to become millionaires," said the 42-year-old Dallas-based manager, who asked not to be identified. "Overnight, people's wealth doubled."

Driver Damon Green said he has visions of wealth even though he didn't buy stock before the public offering. "I thought about it, and I'm still thinking about it," he said. "Maybe I'll buy some around Christmas."

The stock offering has improved morale, but divisions are still felt over a bitter 15-day strike by Teamsters two years ago that shut down the carrier service, Taylor said.

"There are still a lot of hard feelings," he said.

"It takes a while for wounds to heal, but we're getting there," said Ken Redding of Teamsters Local 728 in Atlanta, which represents 4,000 UPS workers. "We're happy, they're happy, everybody's building some bridges," he said Thursday. "[Wednesday] was a great day for a lot of hourly employees."

Still, UPS' rank and file saw nowhere near the paper profits realized by management. Kelly, the chairman and CEO, saw his 414,344 shares triple to $31 million, for example.

The Associated Press contributed to this article.

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