Auto industry urges Biden to act in dockworkers strike

Tom Krisher and Tassanee Vejpongsa
| Associated Press

Philadelphia — The US auto industry is urging action by the White House after dockworkers at 36 ports from Maine to Texas went on strike for the first time in decades in an action that could snarl supply chains and cause shortages and higher prices if it stretches on for more than a few weeks.

These ports handled 34% of all US motor vehicle and parts trade last year, according to the Alliance for Automotive Innovation, an industry trade group in the United States. That represented $135.7 billion worth of imported and exported goods. Automakers and suppliers were able to prepare somewhat for the strike, diverting shipments to the West Coast, Mexico or Canada, but if the work stoppage becomes extended, it could halt vehicle production.

“These ports are a major artery for the global auto industry,” John Bozzella, CEO of the alliance, said in a statement. “A protracted strike will be debilitating to the auto supply chain and set off economic and national security ripples across the country — harming auto communities and consumers. The administration needs to get all sides back at the table and broker a resolution.”

Workers began walking picket lines early Tuesday in the strike over wages and the ports’ use of automation, though some progress was reported in negotiations over a new contract. The existing contract between the ports and about 45,000 members of the International Longshoremen’s Association expired at midnight.

East Lansing-based Anderson Economic Group estimates that a one-week strike could cost the picketing workers and the US Maritime Alliance, which represents the ports, $2.1 billion with a strike lasting longer than a week beginning to affect retailers and manufacturers.

The strike comes just weeks before a tight presidential election and could become a factor in the race if shortages begin to affect many voters.

“Collective bargaining is the best way for workers to get the pay and benefits they deserve,” President Joe Biden said in a statement. “I have announced USMX, which represents a group of foreign-owned carriers, to come to the table and present a fair offer to the workers of the International Longshoremen’s Association that ensures they are paid appropriately in line with their invaluable contributions.”

In early picketing, workers outside the Port of Philadelphia walked in a circle and chanted, “No work without a fair contract.” The union, which is striking for the first time since 1977, posted message boards on the side of a truck reading: “Automation Hurts Families: ILA Stands For Job Protection.”

Boise Butler, president of the union local, asserted that the workers want a fair contract that doesn’t allow for the automation of their jobs. The shipping companies, he struggles, made billions during the pandemic by charging high prices.

“Now,” Butler said, “we want them to pay back. They’re going to pay back.”

He warned that the union plans to strike for as long as it needs to achieve a fair deal and has valuable leverage over the companies.

“This is not something that you start and you stop,” Butler said. “We’re not weak,” he added, pointing to the union’s vital importance to the nation’s economy.

At Port Houston, at least 50 workers started picketing around midnight local time carrying signs saying, “No Work Without a Fair Contract.”

The US Maritime Alliance said Monday evening that both sides had given some ground on their previous wage demands. But no deal was reached.

Labor experts suggest that the striking workers may wield the upper hand in the standoff. The union’s most recent contract with the alliance was negotiated before the COVID-19 pandemic. Factors ranging from the effects of inflation to increased workloads from pandemic-era demands to a more generous contract achieved by the dockworkers’ West Coast counterparts have boosted their standing to demand higher pay, better workplace protections and a slowdown in the automation of work functions.

“This is a very opportune time,” said William Brucher, an assistant professor of labor studies and employment relations at Rutgers University.

Although inflation has diminished, Brucher noted, the cost of living is still much higher than it was before COVID-19, which means the buying power of workers’ wages has shrunk.

Brucher also pointed to momentum from other labor activity over recent years, as unions across industries have demanded more and seen companies provide concessions as a result. And the contract agreement made last year with West Coast dockworkers, who are represented by a different union, shows that “higher wages are definitely possible” for the longshoremen and has enhanced their bargaining power.

The United Auto Workers last year negotiated record contracts for its members employed by the Detroit Three automakers, including 27% compounded wage hikes over four years, shorter timelines to the top wage, cost-of-living adjustments and other benefits.

The United Auto Workers, in a post shared on the social media platform X, voiced its solidarity with the port workers “fighting for economic justice”: “Without their labor, nothing in this country moves.”

In statements, representatives for General Motors Co., Ford Motor Co. and Stellantis NV all said they were monitoring the situation and taking steps to mitigate potential impact to production or to deliver vehicles to customers.

“It is too early to speculate on potential impacts, if any,” Ford spokesperson Lars Weborg said in a statement.

Bill Long — president and CEO of MEMA, the vehicle suppliers association — in an email to members said the organization was urging action by the White House to compel both sides to the bargaining table with the risk of plant shutdowns in the coming weeks.

Biden has the power to intervene and end the strike using the Taft-Hartley Act, which allows him to seek an 80-day cooling off period.

But during a Sunday exchange with reporters, Biden, who has worked to court union votes for Democrats, said “no” when asked if he planned to intervene in the potential work stoppage.

Impact to US auto production could begin to show in as early as a week, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions LLC. Some automakers, however, are more vulnerable than others.

“Mercedes and BMW and probably Volkswagen, a lot of their components come from Europe” including engines and transmissions, Fiorani said of the companies that could face the first effects. “There’s only so much that manufacturers and suppliers can hold. There’s a long travel time from Europe, and there’s only so much they could have prepared for.”

Especially for the Mercedes-Benz Group AG and BMW AG, many of their top-selling vehicles in North America are built here and won’t face issues with importation. Other manufacturers source more heavily from North America and Asia, though a long strike could require alternative sourcing or limitations on trim options, Fiorani said.

“A lot of manufacturers have planned ahead as best as they can,” he said. “Going through Canada or going through Mexico, you’re adding expense, and there are logistical issues with getting trains, trucks and containers to get stuff moved around.”

Vehicle inventory is back to pre-pandemic levels, so there is healthy supply for now. But container prices have been higher this year in general because of various events, including the Canadian railroad workers’ strike and preparations ahead of this action, said Charles Klein, station manager in Detroit at OEC Group, an international logistics provider.

“If ocean prices continue to rise,” he said, “auto manufacturing will pay a higher cost to transport those goods from importers and shippers, and potentially that will be passed onto consumers as we’ve seen in the past supply chain discussions.”

Leading up to the strike, the Longeshoreman union’s opening offer in the talks was for a 77% pay raise over the six-year life of the contract, with President Harold Daggett saying it’s necessary to make up for inflation and years of small raises. The union members earn a base salary of about $81,000 per year, but some can pull in over $200,000 annually with significant amounts of overtime.

On Monday evening, the alliance said it had increased its offer to 50% raises over six years and pledged to keep limits on automation that are in place from the old contract. The alliance also said its offer tripled employer contributions to retirement plans and strengthened health care options.

The union, though, wants a complete ban on automation, and it was unclear how far apart the two sides are on the issue.

In a statement early Tuesday, the union said it rejected the alliance’s latest proposal because it “fell far short of what ILA rank-and-file members are demanding in wages and protections against automation.” The two sides have not held formal negotiations since June.

Consumers won’t likely feel any consequences from the strike right away, supply chain experts say. In anticipation of a strike, most major retailers have stocked up on goods, moving ahead shipments of holiday gift items. But if the work stoppage drags out for more than a few weeks, consumers could feel the effects.

If drawn out, the strike could cause some goods to arrive late for peak holiday shopping season, potentially disrupting the delivery of anything from toys and artificial Christmas trees to cars, coffee and fruit. The strike will likely have an almost immediate impact on supplies of perishable imports like bananas. The ports that are affected by the strike handle 3.8 million metric tons of bananas each year, or 75% of the nation’s supply, according to the American Farm Bureau Federation.

Though consumers might face higher prices for some of these items over time, businesses will likely take hits sooner. In addition to paying for delays, competition to keep prices down or relatively stable may lead some affected companies to incur extra costs.

Jay Foreman, CEO of Basic Fun, which makes such toys as Care Bears and Lincoln Logs, said he has been monitoring the port situation for months and planned for it by shifting all container shipments to West Coast ports. But he said the shift added anywhere from 10% to 20% extra costs that his company will have to absorb.

Foreman added that Basic Fun’s prices for the next 10 months are locked in with retailers but that he might have to raise prices during the second half of 2025 if the strike is prolonged.

“We were expecting a good holiday season, but now those extra costs are going to eat into profits,” he said. “It affects raises and bonuses.”

The strike could also snarl exports from East Coast ports and create traffic jams at ports on the West Coast. Railroads say they can ramp up to carry more freight from the West Coast, but analysts say they can’t move enough to make up for the closed Eastern ports.

JP Morgan estimated that a strike that shuts down East and Gulf coast ports could cost the economy $3.8 billion to $4.5 billion per day, with some of that recovered over time after normal operations resume.

In an update Tuesday morning, the White House maintained that administration officials were working “around the clock” to help negotiations move forward. Biden and Vice President Kamala Harris were also “closely monitoring” potential supply chain impacts, the White House added, enlisting a task force to meet daily and prepare for any disruptions.

Biden’s keeping his word on not intervening carries a lot of weight for the coming election, experts say.

“Democrats really can’t afford to alienate organized labor,” Brucher said.

Taft-Harley injunctions by a president are “widely despised” by unions across the country, he said, and those same unions are necessary for turnout at the polls, particularly for Harris’ campaign.

Krisher reported from Detroit. Associated Press journalists Ben Finley in Norfolk, Virginia, Mae Anderson and Wyatte Grantham-Philips in New York, Dee-Ann Durbin in Detroit, Josh Boak in Washington, and Annie Mulligan in Houston contributed.

Detroit News Staff Writer Breana Noble contributed.

Auto industry urges Biden to act in dockworkers strike

By meerna

You Missed

The Devils defeated the Sabers 4-1 in the first game of the NHL regular season in Prague

With 3 playoff spots remaining, MLS teams are fighting for postseason position

The Dodgers need to learn from the hated Astros if they want to make a deep run in the postseason

Louisville vs. SMU: Live Broadcast and TV Information

Auto industry urges Biden to act in dockworkers strike

By meerna

Related Post

The Devils defeated the Sabers 4-1 in the first game of the NHL regular season in Prague

With 3 playoff spots remaining, MLS teams are fighting for postseason position

The Dodgers need to learn from the hated Astros if they want to make a deep run in the postseason

You Missed

The Devils defeated the Sabers 4-1 in the first game of the NHL regular season in Prague

With 3 playoff spots remaining, MLS teams are fighting for postseason position

The Dodgers need to learn from the hated Astros if they want to make a deep run in the postseason

Louisville vs. SMU: Live Broadcast and TV Information