Bush to Intervene in West Coast Port Lockout

October 7, 2002

President Bush will intervene in the West Coast port lockout Monday under the Taft-Hartley Act by forming a board of inquiry, a potential first step toward ending a dispute that has shut down 29 West Coast ports and sapped billions from the economy.

The board is to make a quick assessment of the economic damage of the labor dispute and determine whether the two sides are negotiating in good faith, two administration officials said.

Bush formed the board hours after talks broke down between the union and management Sunday night after the union rejected the latest contract proposal.

After the International Longshore and Warehouse Union (ILWU) rejected the offer, talks in San Francisco broke off indefinitely at about 11:30 p.m. Sunday, said Steve Sugerman, a spokesman for the Pacific Maritime Association (PMA). The negotiations came to a halt after administration officials said over the weekend they saw signs of progress.

A call to union president James Spinosa was not immediately returned early Monday.

The board will make a determination within a matter of days.

Bush then would have to make his case in federal court, asking for a ruling to end the lockout for an 80-day cooling off period because the dispute is "imperiling the national health or safety."

The White House has already gotten involved in the lockout by offering mediation. Both sides accepted last week.

The Taft-Hartley Act has not been invoked since former President Carter failed to win a 1978 injunction he sought against coal miners. Administration officials say the cooling off period has rarely worked to end labor disputes, and Bush's political advisers fear invoking the act would energize the Democratic Party's labor base in the run-up to November's critical midterm elections.

However, the same officials say a cooling off period would delay the economic fallout until after the Christmas holidays.

PMA is pushing for an extension of the old contract, which specifically forbid the kind of work slowdowns the PMA said prompted the shutdown Sept. 29. The union has refused, holding out for a new three-year contract that would give it control over any jobs that come with new technology.

Implementing labor-saving technology like electronic tracking devices puts only a small number of jobs at risk in the short term, but future jobs are at stake, as well as control of the flow of information at the ports.

The PMA has always given the ILWU jurisdiction over new technology in the past, union negotiator Joseph Wenzl said Sunday.

"The union feels we have offered a proposal that meets the employer in the middle," he said.

Meanwhile, analysts and business leaders said a second week of a West Coast port shutdown will cause a noticeable increase in plant closings, job losses and financial market turmoil.

Already, storage facilities at beef, pork and poultry processing facilities across the country are full, crammed with produce that can't be exported.

Experts have estimated the shutdown could cost the U.S. economy $2 billion a day, and one report said a 20-day shutdown would cost $48.6 billion.

With nowhere to move their product, plant operators will begin shutting down Monday and layoffs will follow, said Mary Kay Thatcher, public policy director of the American Farm Bureau Federation.

In less than two weeks, if the shutdown continues, manufacturing plants will be grinding to a halt all over the country, farmers will be up in arms, and Asian equity and currency markets could face a full-blown crisis, said Steven Cohen, a University of California, Berkeley professor of regional planning.

"It's like draining a swamp. You start seeing all kinds of ugly creatures," he said.

Cohen, who studied the economic impact of the port closure for the shippers' association, said a five-day shutdown would cost the U.S. economy about $4.7 billion, while a 20-day shutdown would cost $48.6 billion.

Robert Parry, president of the Federal Reserve Bank of San Francisco, said last week the stoppage could cost the economy $2 billion a day.

The number of cargo vessels stranded at the docks or backing up at anchor points has risen to about 200 since the lockout, with dozens more still en route from Asia.

According to American Farm Bureau Federation figures, between 20 percent and 30 percent of all U.S. agriculture products are exported, and a third of that goes to the Pacific rim -- mostly through the West Coast ports.

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