WUOMFM

West Coast port standoff threatens Michigan auto production

Feb 13, 2015

A ship waits to be unloaded at the Port of Oakland
Credit D.H. Parks/Flickr / wikipedia.org

Automakers and their suppliers are growing increasingly worried about a standoff between the Pacific Maritime Association and the International Longshore and Warehouse Union.

The union represents longshoremen at West Coast ports, where tons of retail, agricultural, and auto sector materials are shipped in and out every week.

Longshoremen have been working without a contract since July, and the Association recently countered the union's work slowdowns with a complete freeze on weekend and overtime hours.

"It's moved from just being a slowdown that you could manage to complete closure of some of the port activities," says Dave Andrea, a senior vice president at OESA, an auto supplier trade group.

Andrea says suppliers have reacted by moving parts shipments to other ports, such as Vancouver, but that's proved to be a Band-aid. 

"As Vancouver picked up additional business, now, of course,  they have backlogs of material through their port," he says.

Suppliers and automakers have also increased their weeks' supply of inventory, which is costly.  And, in rare cases, says Andrea, parts have been sent to factories by air - at very great expense.

Andrea says the recent appointment of a federal mediator to oversee the negotiations is welcome, but a more drastic step may be needed.

That's the invoking of emergency powers under the Taft-Hartley Act, which could bring the standoff to an end while increasing federal involvement in the negotiations.