The current contract between the International Longshore and Warehouse Union and employers is due to expire tomorrow, July 1, but nearly all observers are expecting talks to continue.
The contract actually expires at 5 p.m., but observers say they don’t expect a deal will be reached until the middle of July and that ports will continue to operate while the labor negotiations continue.
The contract was a major topic of discussion at the annual meeting of the Agriculture Transportation Coalition in San Francisco last Thursday and Friday.
J. Christopher Lytle, the executive director of the Port of Oakland, said his message to the two lead negotiators in the talks — Robert McEllrath, president of the ILWU, and James McKenna, the president of the employer group the Pacific Maritime Association — would be, “We need a fair contract and a good contract, but let’s get it done quickly. Let’s not have this thing out there languishing. We know it is not going to be done by the first of July, but what we don’t want is this off until the end of July, until August and so on.
“I don’t think that’s going to happen,” he added.
As a landlord port, the Port of Oakland is not a party of the ILWU-PMA negotiations, but its terminal operator tenants and shipping company users are.
Lytle said, “I think the contract has to respect the hard work of many of the union members,” but he added that the contract “can’t be just another contract, another rubber stamp. This contract has to incorporate, and should incorporate, some of the efficiency and productivity elements that are so essential to make sure the West Coast stays competitive. That’s a very important part.”
Lytle expressed, though, that the new agreement should be a partnership. “I’m not talking about having the employers go out and say ‘We are going to tell you how it is; this is what you’re going to have to take; this is how it is.’ It has to be a collaboration. I would hope that the leadership of the ILWU understands that productivity and efficiency is critical for them, as it is for employers.”
He told the audience of agriculture and forest product shippers, “I want to see them put something together and be able to have a contract that all of you in the room say ‘Wow, they are actually taking a step forward.'"
Lytle said that since 2002, West Coast ports have seen an 8-percent drop in market share, while ports on the East and Gulf coasts have gained. And, he noted, those gains have come before the opening of the new expanded locks at the Panama Canal, which are expected to benefit ports on the East and Gulf coasts — "nothing dramatic, but death by 1,000 cuts,” he said.
He said the major container ports on the West Coast — Seattle Tacoma, Portland, Oakland, Los Angeles and Long Beach — all have excess capacity. Capacity is growing, he said, at some ports where automated terminals are being built. For example, the Long Beach Container Terminal is developing the Middle Harbor project; in Los Angeles, TraPac is modernizing its facility.
The AgTC conference also featured a presentation by Don Crosatto, senior area director for the Machinists Automotive Trades District 190 of Northern California, which has 900 mechanics, including workers who repair cranes and chassis at shipping terminals, and which sometimes competes with the ILWU for jurisdiction over waterfront jobs.
He said he shared the view that a strike by the ILWU was extremely unlikely, and he predicted a three-year contract, with difficult negotiations over issues having to do with the health care and the ILWU pension being “kicked down the road” until 2017. He said that one reason he believes that is the “human element. Most people, when faced with some really difficult decisions, will typically look for a way to put it off for a little while.”
He believes the two principal negotiators, McKenna and McEllrath, “get along pretty well, all things considered. They’re both in their early to mid- 60s; they got to be thinking along the lines of retirement. It’s got to be awfully tempting to say, ‘Let’s just get a three-year contract, keep going the way we’re going, put it off for 3 years, have a nice retirement party in 2016.'
“If there is one thing that could cause it to go off the rails it’s this whole Cadillac tax and health plan issue,” he continued. The “Cadillac tax” is the tax being imposed on high-benefit, high-cost health care plans.
Crosatto also said that he had heard “from a good source that has been in the negotiation that most of the last month has been occupied by arguing and bargaining over chiropractic benefits” and suggested the ILWU was making a mistake by negotiating minutia during contract talks. The two sides, he said, would be better off if there was a trust fund handling benefits that negotiated such details.
He said the ILWU pension plan was a “ticking time bomb” because it was likely that automation will lead to a significant decline in manpower.
Crosatto’s remarks drew a sharp response from ILWU Secretary-Treasurer William Adams, who told Crosatto that he reminded him of a "scab." He questioned Crosatto's ability to have any knowledge of what was going on behind the closed doors where the negotiations were taking place. Crosatto declined to identify his source.
Adams told Crosatto, "I take offense at your cowardly lambasting my union. But I’m glad we showed up today. I can’t believe the negativity. We haven't had a strike on the West Coast since 1971. In 2002, there was an offensive lockout by the PMA. People should have a positive attitude."
He said while the union has said it is not going to negotiate its contract in public, both he and McKenna had gone to Washington to meet with West Coast senators, Secretary of Transportation Anthony Fox, Secretary of Labor Thomas Perez and representatives from the White House.
Adams noted that he is commissioner for the Port of San Francisco and that the ILWU has 11 members who are commissioners at ports along the West Coast and that they are committed to seeing West Coast ports remains competitive.
“We know when we lose discretionary cargo, we never get it back,” he said.