A lockout of union longshoremen at 29 West Coast ports sent immediate ripples through the US economy yesterday, threatening the motor vehicle industry, a Reuters report said.
According to Reuters, port employers said the indefinite lockout could cost the economy as much as $US1 billion a day, was spurred by the International Longshore and Warehouse Union, whose 10,500 members have been working without a contract since July 1, and have denied slowing shipments as a negotiating ploy
“It’s not helpful at a time when car sales are already moderating,” Paul Taylor, chief economist of the National Auto Dealers Association, told Reuters.
Reuters said the dispute — between the Pacific Maritime Association, which represents management at ports from Seattle to San Diego; and the ILWU, centres on threats to jobs from new technology and, fighting back against what it called unauthorised work slowdowns, management ordered a lockout from Friday night until Sunday morning.
After that 36-hour “cooling off” period, dockworkers were allowed back on the job on Sunday morning, only to be locked out again on Sunday night, Reuters added.
The effects were soon felt by the motor industry, according to Reuters.
Michael Damer, spokesman for New United Motor Manufacturing Inc, told Reuters that the joint-venture plant between General Motors and Toyota in Fremont, California would have to close in five to six days for lack of parts if the lockout persists.
Reuters, citing industry representatives, said the port shutdown also threatened to strand hundreds of imported vehicles already unloaded from ships but awaiting trucks to take them to dealers.
Hyundai spokesman Chris Hosford told Reuters that unionised truck drivers refused to cross an informational picket line set up in Los Angeles, stranding several hundred of the company’s cars yesterday.
Reuters said that Asian car makers, importing complete vehicles and parts, said overall inventories were sufficient for now, but that some links in the supply chain were tightening, including parts and hot-selling models.
Toyota spokesman Xavier Dominicis told Reuters his company had a two to four week inventory of cars in dealer showrooms, but just 12 days supply for the Lexus RX 300 SUV.
The Reuters report also said that trucking fleets whose vehicles were idled waiting at ports for goods faced bankruptcy within days.
This could also have a follow-on effect on the motor industry which depends heavily on trucks to bring in parts and other supplies and ship out finished vehicles and parts invntory to dealers.