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Wednesday, April 16, 2014
Obamacare Punches $150M Hole in ILWU Contract
By News Release @ 2:18 AM :: 5076 Views :: Jones Act, Labor

ILWU Negotiations to Begin May 12, Employers Say

From Journal of Commerce, April 15, 2014 (excerpt)

...Conspicuously absent from the (ILWU negotiations) caucus report are the “Cadillac” tax in the federal Affordable Health Care Act and the proposed length of the new contract.

McKenna however said those issues will actually be front and center in the negotiations. “The health care plan needs to be addressed,” he said.

Obamacare’s tax on generous health care plans, which is meant to subsidize the millions of workers in the U.S. that have little or no health coverage so they, too, have access to affordable health care, is set to begin in 2018.

On the West Coast, employers pay 100 percent of the premiums in the ILWU health care plan, and union members pay just a $1 co-pay per prescription for medicine. The PMA estimates that the new tax will cost the industry $150 million a year. Employers have indicated that a cost-sharing formula can be worked out. The ILWU, in its traditional “no-give-back” strategy, does not want to pay any taxes on its health care plan.

Longshore rank and file have such strong feelings against the Affordable Health Care Act that ILWU President Bob McEllrath, in an Aug. 29, 2013, letter to AFL-CIO President Richard Trumka, said the ILWU was leaving the umbrella labor organization in part because of the AFL-CIO’s “moderate, overly compromising policy” on national issues such as health care reform.

The health care issue also figures into the length of the contract. Recent contracts have been for six years. Retailers and other cargo interests prefer that timeline because it provides for a longer period of stability on the docks. Negotiators this year could be asked to aim for a three-year contract that does not address health care in the hope that Congress would take action before 2018 to remove the Cadillac tax.

McKenna has met in recent weeks with groups representing beneficial cargo owners and told the importers and exporters he expects contentious negotiations. However, he repeated the analysis he presented at TPM that he expects an agreement will be reached a week or two after the July 1 deadline without an employer lockout or work stoppage.

McKenna today emphasized that cargo interests should not panic if the ILWU does not agree to a new contract by July 1. “They will never resolve a contract before the current one expires,” he said.

Over the years, the ILWU has leveraged missed deadlines to secure some of the most lucrative contracts in blue-collar America. According to the 2013 PMA Annual Report, dockworkers who worked at least 2,000 hours last year had the following average annual earnings: general longshoremen, $137,253; marine clerks, $154,842; and walking bosses/foremen, $213,120.

read ... Journal of Commerce

Meanwhile:

Panamax will reduce West Coast Cargo

ILA Signs 6 Year Contract 2013-2019

  *   *   *   *   *

Retailers Urge Expedited Contract Negotiations at West Coast Ports

NRF Members Already Making Contingency Plans in Preparation for Holidays

News Release from National Retail Federation

WASHINGTON, April 14, 2014 – The National Retail Federation today urged maritime management and the union representing dockworkers along the U.S. West Coast ports to expedite pending contract negotiations and reach agreement on a new deal well in advance of the expiration of the current contract this summer. NRF believes expedited negotiations would strengthen the supply chain and provide shippers and retailers the certainty they need to utilize the West Coast ports during the holiday shipping period, which begins in July.

“We urge you to begin contract negotiations now and to attempt to reach agreement on a new contract before the June 30 expiration,” NRF President and CEO Matthew Shay said. “These negotiations are important to all of the import and export and related industries who rely on these ports to move the nation’s commerce.”

Shay asked for immediate contract negotiations in a letter to the International Longshore and Warehouse Union and Pacific Maritime Association, who currently plan to start negotiations in mid-May. The pending contract covers nearly 14,000 ILWU jobs at 29 containerized ports along the California, Oregon and Washington coastline.

A majority of imported retail goods are shipped through West Coast terminals and gates. According toNRF’s Global Port Tracker report, major West Coast ports handled 11.2 million cargo containers in 2013, or 69 percent of the total at U.S. retail container ports followed by the report. Given the importance of the West Coast ports, retailers have already begun to develop alternative plans to ensure the proper flow of holiday merchandise.

“NRF’s members, as well as other stakeholders, have already begun contingency planning to ensure their cargo does not get caught in potential disruptions,” Shay said. “Any kind of disruption at the ports would add costly delays to our members’ supply chains and other industries relying on U.S. West Coast ports, and it likely further threatens the fragile economic recovery.”

The last major supply chain disruption to affect the entire West Coast took place in the fall of 2002, when management locked out dockworkers for 10 days. The prolonged work stoppage, which was ultimately stopped when President George W. Bush invoked the Taft-Hartley Act, significantly impacted the global supply chain and cost the economy between $500 million and $2 billion a day.

In its letter, NRF urged the union and management to publicly commit to remaining at the negotiating table leading up to the June 30 contract deadline and to maintain service at the ports by continuing to negotiate even after the contract concludes.

“We would further ask that you issue a statement committing to the commencement of meaningful negotiations now, and to commit to continue negotiating and working without interruption or reduced productivity even if negotiations extend beyond the June 30th contract expiration,” Shay said. “Both parties must recognize their role in the global economy and the need to ensure predictability and reliability for the many diverse stakeholders who rely on the ports.”

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation. www.nrf.com.

###

FULL TEXT: NRF Letter to ILWU, PMA

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