Can Perez Fix The West Coast Labor Dispute?
Labor Secretary Tom Perez arrived in San Francisco on Tuesday in the hopes of bringing the nine month-long port dispute to an end.
Since May, the Pacific Maritime Association and the International Longshore and Warehouse Union have been struggling to agree on a new labor contract. The inability to come to a deal and the resulting port congestion, slowdowns and two shutdowns has prompted vast economic concern, especially among those in the retail and trade industries.
Despite not having legal authority to force an agreement, outsiders hope Perez can still prompt the two sides to finally reach a deal. Even if Perez is able to get the two sides to come together, it is likely going to take time since previous attempts by a federal mediator and pressure by local and federal lawmakers have so far been unsuccessful.
As time passes, the negative impact on the economy only worsens. As The Associated Press reports, $1 trillion worth of goods annually are handled by the 29 ports along the West Coast. This includes Asian imports such as electronics, household goods and clothing as well as U.S. exports such as produce and meat.
Mark Morrison, a spokesman for Honda, noted that plants in Ohio, Indiana and Ontario, Canada have had to slow production because of a shortage of parts coming in.
“We do not have a sufficient supply of several critical parts to keep the production lines running smoothly and efficiently,” Morrison told Reuters. “These parts include a small number of critical parts such as electronics, and some larger assemblies such as transmissions.”
Honda and other car makers have tried to work around the dispute by importing parts by airplane. As Kurt Salmon, a global management consulting firm, detailed in a press release, importing goods by air has already been used by other industries. However, using airplanes as an alternative is more expensive which has been reflected in the cost of goods.
Retailers have grown so concerned they have sent several letters to the PMA and ILWU along with lawmakers in the hopes of resolving the conflict. In the most recent letter, dozens of manufacturers, farmers, wholesalers, retailers, importers, exporters and distributors wrote to express their concern over the rhetoric and growing hostility they have seen from both sides throughout the negotiation process.
“As customers of your ports, and industries affected by their operations, our members desperately need this negotiation to be concluded and operations returned to normal levels of through-put,” the letter noted.
“Over the summer months, both sides verbally agreed to work during the negotiations without interruptions,” the letter continued. “That promise was broken and the consequences have been to the detriment of our collective industries, the economy and our global competitiveness.”
“The stakes are extremely high and the uncertainty at the West Coast ports is causing great reputational and economic harm to our nation,” the letter declared. “The competitive marketplace will respond if you continue on this current path.”
As the letter points out, foreign competitors are already using the slowdowns and the resulting uncertainty as a reason not to purchase American made or grown products.
Talking to a crowd of local business leaders, Los Angeles Mayor Eric Garcetti reflected the same concern.
“But that means that our agriculture, that means that our raw materials that we’re exporting out of the Port of L.A., are not moving,” Garcetti warned according to My News LA. “Trade may never come back if we don’t resolve.”
Sources for The Daily Caller News Foundation note that both the PMA and ILWU have been asked not to make further comment on the negotiations for the time being.
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