Northwest Grain Bosses Want EGT Concession Deal-ILWU Pres McEllrath's "Victory" Coming Home To Roost

Northwest Grain Bosses Want EGT Concession Deal-ILWU Pres McEllrath's "Victory" Coming Home To Roost

Northwest, Midwest farm fortunes ride on longshore grain talks

Published: Sunday, September 09, 2012, 11:00 AM     Updated: Monday, September 10, 2012, 3:26 PM

http://www.oregonlive.com/business/index.ssf/2012/09/northwest_midwest_f...

 By Richard Read, The Oregonian 

View full sizeBrent Wojahn/The OregonianThe STX Amber, a 38,000-ton cargo vessel, takes on grain Wednesday at the EGT terminal in Longview, Wash. EGT negotiated concessions from longshoremen that grain handlers would like to replicate.
Farmers across the Northwest and Midwest are watching nervously as longshoremen and grain terminal operators start negotiations with far higher stakes than in the disputes that caused chaos at the Port of Portland this summer. 

The disputes diverted ships and clogged cargo as far away as Idaho and India but affected a relatively small container port. The grain talks involve a couple of Puget Sound terminals and, most importantly, operations on the Columbia River, which is the nation's top wheat export outlet. 

If the talks fail to replace a contract expiring Sept. 30, wheat, corn and soybeans would back up across the U.S. grain belt, affecting billions of dollars in exports and tens of thousands of jobs. 

No one predicts failure. But the negotiators, who occupy the narrow end of a gigantic U.S. grain funnel, face unprecedented pressure. 

Leaders of the powerful West Coast longshore union, stung by legal defeats regarding Portland, want to avoid the sort of major concessions in a contract signed this year with a Longview terminal where dockworkers rioted. But Portland and Puget Sound employers want those kinds of concessions to compete with the new, modern Longview terminal that has cut labor costs and boosted productivity. 

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"Leveling the playing field and avoiding extreme competitive disparities among Northwest grain shippers and ports is vital," says a statement issued by the Pacific Northwest Grain Handlers Association, which represents the four companies employing the longshoremen.

The talks that began last week are the latest front lines in an escalating contest over jobs and working conditions between employers and the International Longshore and Warehouse Union. The union, which has more than 42,000 members, is striving to preserve and extend its hard-won jurisdiction as employers automate ports and try curbing labor expenses. 

Neither the union nor the employers' group would talk. But growers of wheat, corn and soybeans loaded on ships by longshoremen at the terminals expressed anxiety. Blake Rowe, chief executive officer of the Oregon Wheat Growers' League and the Oregon Wheat Commission, said customers unable to get U.S. wheat in the event of a disruption could become accustomed to buying grain elsewhere. 

"It'd be a real shame to see them reach some impasse, because that hurts everybody including our customer relationships," said Rowe, who represents about 2,000 Oregon growers. "We'd damage our reputation for being secure, steady suppliers." 

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Northwest terminals will handle nearly half of the 33 million metric tons of U.S. wheat expected to be exported this year, at least a $10 billion crop if prices stay high. About a quarter of U.S. grain exports go through nine Northwest terminals. The region ships more than a quarter of U.S. soybean exports. 

The grain handlers' organization won't disclose quantities shipped from the six terminals involved in the negotiations, and it won't reveal the number of longshoremen working there. But port industry officials describe volumes as massive, saying a stoppage would back up grain at farms and country elevators extending to the Dakotas and beyond. 

The companies that own the terminals covered by the talks are branches of industry giants. 

In Vancouver, United Grain Corp. is part of Mitsui & Co. Inc., a Japanese conglomerate. In Portland, Columbia Grain International Inc. is owned by Marubeni Corp., a big Japanese trading company. Marubeni's purchase of another U.S. grain merchant is on hold while antitrust officials consider that company's part ownership of Kalama Export Co., a Columbia River terminal outside the current labor talks. 

Temco, in Portland and Tacoma, is a joint venture between CHS Inc. and Cargill Inc., a huge U.S. multinational. Louis Dreyfus Commodities Inc., in Portland and Seattle, is a Netherlands-based agricultural giant. 

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Continuing coverage of a labor dispute at the Port of Portland between the longshore union and an electricians union that has backed up traffic and diverted shipments.
The terminals hire longshoremen from four locals that list 2,300 members. The union workers make an average $98,000 a year, according to the Pacific Maritime Association, an organization that represents West Coast employers but not the grain handlers. 

The negotiations may not concern pay as much as working conditions. That's because of the concessions in the contract that Longview longshore Local 21 signed Feb. 9 with EGT, or Export Grain Terminal.

A comparison of that contract and the current grain handlers' agreement, both obtained by The Oregonian, reveals significant differences that save money and time for EGT. 

EGT, owned by European and Asian companies, gets to hire longshoremen in two shifts of up to 12 hours instead of two eight-hour shifts and one higher-paid five-hour graveyard shift. The EGT deal dispenses with goodies such as pay for so-called dead time when longshoremen finish loading ships before a shift ends or when bad weather halts operations. 

EGT can seek damages for work stoppages. The company can stop hiring longshoremen if the union doesn't pay the damages or if an arbitrator finds that three or more stoppages have occurred during the five-year contract. 

Those provisions contrast not only with the current grain handlers' contract but with the Pacific Maritime Association agreement that covers many West Coast longshoremen -- and which the union tried to apply in Portland, where it tried to take over the equivalent of two jobs performed by electricians in another union. 

The EGT contract, which the main San Francisco-based longshore union did not sign, came after the company shut out longshoremen, who picketed and stormed the Longview port. Washington Gov. Chris Gregoire intervened to reach agreement after a federal judge found the longshore union in contempt of court for violating a restraining order. 

In Portland, another federal judge declined to hold the union in contempt in July but issued a ban on slowdowns at the Port of Portland's container terminal. U.S. District Judge Michael Simon met again Friday with lawyers involved in lawsuits related to the Portland dispute, which reached a partial resolution Aug. 13 when the National Labor Relations Board ruled that the contested work belonged to the electricians. 

Mike Steenhoek, executive director of the Soy Transportation Coalition, an Iowa-based soybean industry group, said a shipping stoppage caused by any problems with the longshore grain negotiations would hurt the Midwest economy. But he also noted that a threatened strike by Atlantic and Gulf Coast longshoremen, who also coincidentally face a Sept. 30 negotiating deadline, would hurt the national economy. 

Such a stoppage by the International Longshoremen's Association, halting container movement at 36 ports from Maine to Texas, would dwarf the Portland, Longview and Columbia River/Puget Sound situations. Shippers would shunt cargo through West Coast ports, unless Pacific Coast longshoremen refused to handle it in solidarity with their East Coast counterparts.