Port Standoff: If No Resolution, What Next?
25 October 2002
stratfor.com
Summary
The long-running labor dispute at West Coast ports could re-emerge as a year-end crisis. But with the buildup for Iraq likely to be in full swing and the economic outlook still fragile, the Bush administration will have little patience for a strike. If one cannot be avoided, Washington could be forced to take more drastic measures.
Analysis
Shipping companies have asked the U.S. Justice Department to hold members of the dockworkers' union in contempt of court for intentionally slowing the pace of operations at West Coast ports, the Seattle Times reported Oct. 24. As part of the complaint, shippers pointed to the fact that 194 ships were waiting to be unloaded off the West Coast ports on Oct. 21, compared to 224 ships 12 days earlier -- at the height of a management lockout of dockworkers.
As the court-ordered "cool-down" period enters its third week, management and labor are even further apart, and the docks are almost as clogged as they were when U.S. President George W. Bush invoked the Taft-Hartley Act on Oct. 9 to end the lockout at 29 ports. Considering that the ports' operations are vital both to a buildup in Iraq and to the U.S. economy, Washington simply cannot afford another crisis precipitated by failed negotiations, which likely would result in a dockworker strike. Fearing the eruption of a new crisis in late December or early January -- at what could be the height of a buildup for Iraq -- the Bush administration will exert extreme pressure on both the labor and management sides to settle.
That will not ensure a settlement, however. According to the Congressional Research Service, of the 35 Taft-Hartley actions since 1947, 10 have resulted in strikes after the cooling-off period expired, and most of those involved longshore workers on the East Coast. If West Coast dockworkers do strike, Washington could have little choice but to take drastic measures, such as a naval takeover of some or all West Coast ports, or even move to formally break up the union. However the port standoff plays out, it will continue to drag on the U.S. and Asian economies, and it is threatening to become a serious distraction for Washington as it tries to focus on Iraq and al Qaeda simultaneously.
The unionized dockworkers, represented by the International Longshore and Warehouse Union (ILWU), and the 80 shipping and stevedoring companies represented by the Pacific Maritime Association (PMA) have become increasingly polarized since Bush invoked Taft-Hartley.
The ILWU has accused the Bush administration of collusion with management, and some union leaders have accused the PMA and the Bush administration of an elaborate strategy to break the power of the unions. The ILWU laid out this accusation in an article, titled "Locked Out and Shaft-Hartley'ed," posted on its Web site. The union considers the PMA's move for a court injunction through the Department of Justice -- which could result in fines and/or imprisonment of union leaders -- as a next step in this strategy.
For its part, the PMA said in an Oct. 23 statement that the union has "engaged in a concerted, systematic work slowdown impacting productivity at every major port," in violation of the court order that ended the lockout and ordered all parties to resume normal operations. As evidence, it reports that in the first week following the lockout, productivity at ports across the West Coast was down sharply when compared with normal operations --citing drops of 34 percent in Oakland, 27 percent in Seattle and Portland, 19 percent in Tacoma, and 9 percent in Los Angeles and Long Beach.
The longshoremen's union denies the accusations, saying instead that the severe backlog of cargo and the overwhelming workload have kept ports from operating normally. Dockworkers said Oct. 15 they had filed charges with the Labor Relations Committee against their employers for deliberately sabotaging efforts to clear the congestion. They also accuse shippers of using the slowdown accusations as a way of breaking their union through the courts.
Chance for Negotiations?
Meanwhile, negotiations on a new contract -- to be overseen by a federal mediator -- were to resume Oct. 24. With both sides exchanging threats and accusations and hardening their positions, any settlement appears to be a long way off.
The two sides will continue to discuss wages and the introduction of new technologies, which shippers believe are crucial to bring ports up to global standards, but which dockworkers fear will displace them. At its core, this dispute centers on whether unions would have any jurisdiction over the jobs such technology would create, behind which lies a battle for control over the future of U.S. ports. Shippers want to introduce technologies that they believe will reduce costs, increase efficiency and help bring West Coast ports up to speed with other U.S. and international ports like Hong Kong, Singapore and Rotterdam. Dockworkers and their union feel that the technology issue is being used as a crowbar to wrest power from the historically strong ILWU and to cut union jobs.
So far, management has maintained an advantage in negotiations. In statements as far back as April, the Bush administration made it fairly clear that it would side with management in the dispute, with Homeland Security chief Tom Ridge and Labor Secretary Elaine Chao warning that the government would consider any labor disruption an issue of national security.
Politically and ideologically, the administration also clearly falls on the side of the shippers and the powerful American retail interests who rely on cost-efficient ports and desire greater technological innovation at manpower-dependent West Coast ports. With such an administration, shippers may have seen the latest contract negotiations as a golden opportunity to push their case for technological innovation while simultaneously prying more power away from the unions.
However, as the stakes rise, the PMA may need to recalculate the amount of support it will receive from Washington. As much as some in the administration may agree with management in principle, the administration is much more interested in avoiding a full-blown crisis. By invoking Taft-Hartley, the issue was put off until after mid-term elections. But now, with the economy still fragile and a war in Iraq likely planned to begin in January or February, Washington will demand a settlement and use all its powers of persuasion to make it happen.
Pressure on Both Sides
The U.S. government can exert a great deal of pressure on both sides to reach a settlement. That pressure may be positive in nature with the PMA and its supporters, but it will be substantial nevertheless. Meanwhile, it has the Taft-Hartley provisions with which to hammer the labor union.
That likely will include pursuing court injunctions against the ILWU -- meant to weaken the union and workers' resolve -- that could result in fines and the arrest of labor leaders. If the ILWU's finances are weakened to the extent that it impacts the Union Strike Fund, support for a strike could be undermined. The administration also could seek to demonize the unions as "unpatriotic" if they were to launch a strike in advance of an attack on Iraq.
Finally, perhaps the most serious pressure that the administration can impose on the unions is the threat to take over port operations with military personnel, as a matter of national security. With congressional approval for military action on Iraq and the stream of warnings that extremists could target U.S. ports, the administration would not have a difficult time making its case. Suddenly the union could be faced with extinction and the dockworkers with the loss of their $80,000-a-year jobs.
Nevertheless, the union could decide to call Washington's bluff and strike. If it does, the onus will fall on the U.S. Navy -- which has some capacity for port operations, given the number of naval ports that handle all kinds of cargo. The Navy also has jurisdiction to take over operations of four "strategic seaports" on the West Coast, including Long Beach, San Diego, Oakland and Tacoma.
Specifically, the job might fall to the Military Sealift Command, a government-owned, civilian-crewed merchant marine fleet that operates vessels used in major military deployments. The MSC would have to be beefed up drastically in terms of personnel -- the vast majority of its 7,500 personnel are sea-going -- and funding.
However, there are serious questions as to whether the Navy (which should be otherwise occupied in January and February with a buildup in Iraq), the MSC or any other government agency would be able to fill the gap left by 10,500 skilled union workers. Currently, there are around 5,000 non-union "casual" dockworkers on the West Coast that possibly could be tapped, but the learning curve could be tremendous, and the productivity slowdown would remain substantial. That would affect not only deployments of military cargo for a war in Iraq but also the $300 billion worth of goods that annually pass through West Coast ports.
Taft-Hartley forces union members to vote on management's "last, best and final" offer. That offer will come sometime before the cool-down period ends Dec. 28. Until then, the administration will make the case to both sides -- with all relevant threats -- that an extended crisis on the docks is not in the interest of the union, the shippers or the country in general. Mutual fear of such an outcome may be the best thing that the current negotiations have going for them. |
