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The idea that those are the only two options is just painful. These are supposed to be the experts, and they cannot conceive of ANY other options, really?

How about addressing that "labor cost disadvantage" by encouraging unions and lobbying for 'em? Fuck it, go to Washington and say it is unfair -- the competitors should ALSO be forced to have unionized labor forces to even the playing field. No more cost disadvantages and UPS made the world a slightly better place in the process.

How about embracing the union as a vital part of the business? Accept that growing profits is not the be-all. Become an employer worthy of those workers even if it means taking a haircut. Because it's worth it in exchange for being able to fucking sleep at night. It is not NECESSARY to treat the employee union as a belligerent that must be fought or "acquiesced" to. Just work with them to make the service better for everyone. In the process, they'll likely find the business gets better in other immaterial ways that more than make up for the reduced profits.

The idea that UPS is on the verge of total collapse as a business if they deal fairly with the union is just noxious. If they're so close to total collapse and bankruptcy that you need to treat your employees like dirt... go ahead and just collapse, please.