WASHINGTON — President Bush continued to say no Wednesday to intervening in the West Coast labor dispute that has closed ports, as businesses, including a chorus of retailers, stepped up pressure for White House action.
This story first appeared in the October 3, 2002 issue of WWD. Subscribe Today.
There’s been no movement in getting labor and management to the negotiating table and it seemed like both sides were taking a breather.
“We need to get the parties talking and we need to reach an agreement to open the ports,” said Peter Hurtgen, director of the Federal Mediation & Conciliation Service, a federal agency aiming to broker a deal.
At press time, the International Longshore & Warehouse Union was still debating whether to accept services of the FMCS. The shippers’ Pacific Maritime Association has agreed to meditation.
It’s been five days since shippers locked out dock workers at all 29 Pacific ports over a bitter contract dispute. Cargo from the Far East, ranging from holiday season merchandise to perishable food, has been stuck on ships or on the docks.
The shutdown is estimated to be costing the U.S. economy $1 billion a day in unsold merchandise and delays in U.S. factories assembling imported parts for cars, computers and numerous other goods, including apparel. Processing of exports is also affected.
Meanwhile, retailers on the West Coast are playing the waiting game. The lockout is just beginning to hold up arriving goods, so current business is not yet disrupted, most report. But if the dispute continues for two weeks or more, trouble could start. Most are hoping President Bush will invoke the Taft-Hartley Act by the end of the week.
Jim Famalette, president and chief executive officer of Fresno, Calif.-based Gottschalks, said if the port shutdown “carries on for a few weeks, our manufacturers could be delayed and we wouldn’t have advertised items on hand. All kinds of things could happen, none of which are good.”
Executives at Pacific Sunwear of California are concerned the port problems will cut into the retailer’s heavy holiday inventory delivery crunch between Oct. 15 and Nov. 28.
“We’re hoping that something will be resolved by this weekend,” said Carl Womack, senior vice president and chief financial officer of the Anaheim-based surf and skate chain. “I think we’ve made no decisions to airfreight goods, believing that, at some point, the President will step back in and put them back to work.”
Headaches for apparel and textile importers are further compounded by uncertainty over how goods will be processed once ports reopen. A lot of the sector’s imports are subject to quotas and many categories are close to filling for the year. There’s no guarantee a container of garments on the docks since Sunday will get processed before a container arriving the day ports are back in business, said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel.
Hughes is also concerned that shippers will start rerouting cargo to East Coast ports and add complications to a fair administration of the quota program.
Business officials want immediate White House intervention. At Bush’s disposal is the Taft-Hartley Act, which allows him to call for an 80-day cooling-off period that would reopen ports for business and allow time for both sides to restart contract talks.
“I would like to urge you to take whatever steps are necessary to get the International Longshore & Warehouse Union and the Pacific Maritime Association back to the negotiating table,” Robert J. Verdisco, president of the International Mass Retail Association, wrote Bush. “We strongly urge you not to delay in your actions.”
White House press secretary Ari Fleischer told reporters Wednesday that he wouldn’t speculate whether the President would intervene in the port dispute. He said the administration continues to monitor the situation.
“The administration continues to urge labor and management to come together to get an agreement because the longer this goes, the more harm it will do to the economy,” Fleischer said.
The 10,500-member ILWU has been working without a contract since Labor Day. Until then, the union agreed on a daily basis to renew their expired agreement. One of the key issues is whether technology updates for the ports will displace union workers. The PMA has said no union members will lose jobs, but union officials question the long-term impact on dock employment.
With ILWU members staging work slowdowns, a fed-up PMA on Friday locked workers out and then reopened the docks for a day before shutting them indefinitely on Sunday.
On Capitol Hill, lawmakers continued to be flooded by calls from business.
“We need pressure from the Hill to get these people back to the bargaining table and stop this nonsense,” said Erik Autor, vice president and international trade counsel with the National Retail Federation.
Rep. John Boozman (R., Ark.), who has heard from constituent Wal-Mart Stores, briefed his Republican colleagues Wednesday morning about the matter. Boozman and Senate colleague Tim Hutchison (R., Ark.), wrote Bush that their “state is already feeling the harsh effect of the impasse with ILWU,” estimating that 7 percent of Arkansas’ gross domestic product travels through West Coast ports.
The standoff also carries potential political consequences leading up to the November congressional elections. Charles Carver, professor of labor and employment law at George Washington University, said the economic drag on the nation from a prolonged port strike could boost Democratic fortunes in the elections. The Democrats are five seats from claiming control of the House and want to hold on to their one-seat margin in the Senate.
“This may help the Democrats because if all of a sudden industries start laying off people, this will become the [national] focus instead of Saddam Hussein,” Carver said.
However, if the two sides don’t agree to mediate their differences soon, Carver said Bush may be keen to intervene. When an airline strike was threatened soon after he took office, the President indicated he would be willing to invoke a cooling-off period if there was a work stoppage, Carver said. A strike never occurred.
Eventually, Carver said, he expects federal mediators to meet with success in getting port labor and management back to the bargaining table.