The effects of a contract dispute between West Coast dockworkers and their employers has begun having implications for local companies, their employees and their customers.
Steve Pride with Toyota Industrial Equipment said the production at the company’s operations at Walesboro have unfortunately been impacted by labor dispute.
“We’ve had to cancel days of production due to the lack of imported parts, but we’re still paying our associates if they choose to work on non-production days,” said Pride, a senior manager of human resources, training and customs compliance with Toyota. Toyota makes forklifts at Walesboro.
“We are utilizing air freight to minimize the impact, but the port delays are making it very challenging for manufacturing operations,” he said.
The labor dispute involves the International Longshore and Warehouse Union and Pacific Maritime Association, representing shipping lines that carry cargo and port terminal operators that handle it once ships dock. It has caused cargo bottlenecks at 29 ports that handle about $1 trillion of trade annually, The Associated Press recently reported.
As contract talks have stalled, so has the flow of trade. Dozens of ships are anchored off southern California, in San Francisco Bay and in Washington’s Puget Sound. They are waiting for dock space that is taking weeks to free up due to employers locking out workers or work slowdowns alleged by the companies.
Aisin Drivetrain in Crothersville supplies transmissions for forklifts to Toyota, and the labor dispute has caused delays in the delivery of parts to Toyota in Walesboro, said Shawn Deppen, vice president of production for Aisin World Corp. of America.
Deppen said the dispute hasn’t had much of an impact on Aisin, one of Jackson County’s largest employers with more than 2,000 workers at three plants, but the company has been paying extra money to air-ship some parts from Japan.
“Most of our customers have just cut overtime and weekend work,” Deppen said, “and we only worry how long other supplies to our customers can last before they run out of parts.”
Deppen said Aisin’s deliveries from Japan currently are about 17 days behind schedule from the port.
Sunright America Inc., which manufactures metal automotive fasteners at its operations in Walesboro, has started to airship material components that would otherwise make their way to Columbus after leaving ports on the West Coast by railroad.
Executive Vice President Toshiaki Takeuchi said because of the changes, the company’s shipments to its customers have started to slow.
Takeuchi said the company is now expecting shipment delays of two to three months and is cutting weekend overtime shifts. The company also is cross-training employees to maximize efficiency, he said.
Auto parts manufacturer NTN Driveshaft Inc., also in Walesboro, has not had to make any changes to its operations but is monitoring the situation very closely, expecting to feel the impact of the failed contract negotiations soon, said Barry Parkhurst, vice president of administration.
“We are starting to look at the possibility of flying some components,” he said. “Some of our customers are having problems and therefore are cutting their schedules.”
Parkhurst said NTN Driveshaft made extra inventory a month ago to try and counter the situation if it ever came to the company’s doorstep. While the company is in good shape for now, he doesn’t expect that to last very long.
“The first thing we’re going to see is our sales are going to be down a bit because customers are staring to cut their schedules,” he said. “All the automotive companies are going to start having issues with it.”
The two sides already have reached tentative agreements on key issues, including health benefits and what jobs the union can retain in the future.
And their wage proposals are not far apart. Under the prior contract, which expired in July, average wages exceed $50 an hour, according to the maritime association.
The issue that brought talks to a stalemate is whether to change the system for arbitrating allegations of work slowdowns, discrimination and other conflicts.
The union is pushing changes that would let either side dismiss an arbitrator when the contract expires, typically after six years. Both sides would then have to agree on a replacement. Driving that change is a desire to replace the arbitrator who handles grievances in Los Angeles and Long Beach.
The maritime association wants to keep the current system, under which arbitrators effectively have lifetime appointments. The association has argued that reappointment pressure might cause arbitrators to sacrifice their independence because of worries they might offend one side and jeopardize their future.
Reporter Chris Jones with The Republic (Columbus), a sister paper to The Tribune, contributed to this story.