West Coast labor strife threatens shipments
June 17, 2002,
Although the recently heightened tensions between India and Pakistan have much of the textiles world bracing for the potential implications, a tense situation here in the United States may be of more immediate concern to the industry.
The focus of the dispute lies mainly in the PMA's proposal to modernize the major West Coast ports, namely Los Angeles, Long Beach and Oakland in California; Portland, OR; and Seattle and Tacoma in Washington. The PMA has said the modernization of the ports would save up to $1 billion annually in inefficiencies and could make some jobs obsolete. The ILWU says it is open to the new technology as long as its members perform the work, the changes make their members' jobs easier, the wealth gained by the productivity gains is shared and, most importantly, no jobs are lost.
Both organizations have reached a standoff, with the productivity of the West Coast ports, through which many home textiles manufacturers and distributors receive their goods, hanging in the balance. If a contractual agreement is not reached by the time the union's contract expires on July 1, workers may then opt to strike or stage a work slowdown. The PMA, apparently unwilling to deal with the accumulation of headaches that may result from a slowdown, has freely admitted it will lock out union members if a slowdown occurs.
In either case, the home textiles industry would emerge as the loser.
"I think the vast majority of the industry will be affected," said Jeff Hollander, president and coo of the Boca Raton, FL-based Hollander Home Fashions. "Even companies that think they don't import do at some point, whether it's a vinyl bag, fill or whatever."
According to "Economic Impact of a West Coast Dock Shutdown," a paper written by Stephen Cohen, professor of Regional Planning and co-director of the University of California at Berkeley's Roundtable on the International Economy, a potential shutdown of the West Coast docks would be a "major shock to the U.S. economy." Cohen cites the dependency of American manufacturers and distributors on imported goods.
Approximately $4.7 billion and 30.2 million man-hours would be lost to the national economy if the West Coast ports are shut down for as little as five days, Cohen said.
Robin Lanier, executive director for the West Coast Waterfront Coalition, said an agreement by July 1 was "highly unlikely." And if no progress is made by then, workers may walk off their jobs on July 6.
"We're urging both sides to stay at the negotiating table until their differences are worked out," Lanier said.
"Any port strike would have some impact on home furnishings given the amount of imports entering the country," said Chip Fontenot, ceo and president of West Point, GA-based WestPoint Stevens. "However, in the case of WPS, we've always tried to balance our import needs with our domestic production. We believe that a strike, if it occurs, will have a minimal impact on our ability to service our customers."
Springs Industries' manager of corporate communications, Molly Laster, echoed Fontenot's comments to some degree, saying the company's customers would not be effected. Laster added that Springs had moved up shipments where possible and was "filling water as much as we can right now. Our distribution folks are on top of it."
If a shutdown does occur, President Bush has the executive authority under the Taft-Hartley Labor Act to order the ILWU back to work under the current contract provisions and both parties back to the negotiating table after a cooling-off period of 80 days.
Pressure has also been brought to bear on the President by the National Retail Federation (NRF) and the International Mass Retail Association (IMRA). In a letter written to Bush, Tracy Mullin, NRF president and ceo, said, "We urge you and your administration to consider immediate steps to prevent a slowdown or shutdown … and to inform the American public of the consequences of such a scenario." IMRA's president, Robert Verdisco, said any disruption would be "devastating to the U.S. economy."
Doug Kahn, coo of Croscill Home, said the two options his company are taking are basically the same as any other home textiles company. First, Croscill has tried to build up its inventories and build "a little bit of an extra buffer." And second, it has secured an all-water agreement, in which ships may travel to other U.S ports on the East Coast or the Gulf of Mexico or to Canada or Mexico. Air freight was a third option but not generally preferred because of the high cost.
But shipping to other ports may also be problematic since the International Longshoremen's Association (ILA), which represents unionized dock workers on the East Coast, has publicly pledged its support of the ILWU.