US Labor Secretary to ILWU, PMA: Reach deal or negotiate in DC

US Labor Secretary to ILWU, PMA: Reach deal or negotiate in DC

U.S. Labor Secretary Tom Perez on Thursday told the International Longshore and Warehouse Union and the Pacific Maritime Association that they have until Friday to reach a contract or they’ll have to negotiate in Washington D.C.

Negotiators for the ILWU and the PMA on Friday were separately reviewing the details of the latest contract proposal and counter-proposal, with the intention of resuming face-to-face negotiations the same day.

Perez's move is the latest sign of how the White House is ratcheting up pressure on both sides, as marine terminals and carriers warn West Coast port congestion is nearing gridlock. The Associated Press first reported Perez’s ultimatum to both sides.

"If a deal is not reached today, we support the decision to move the negotiations to Washington and we call upon the president to personally engage in the discussions until an agreement is reached," Jonathan Gold, vice president of supply chains and customs policy at the National Retail Federation, said in a statement.

The White House has held back for months from getting directly involved in talks between both sides, saying it was confident the ILWU and PMA could work out a deal. But in the ninth month of talks and with shippers’ frustration with delays caused by alleged ILWU slowdowns at a boiling point, President Obama dispatched Perez to negotiations in California on Tuesday.

Wal-Mart became on one of latest retailers to warn of the damage of West Coast congstion, telling investors Thursday that shipment delays threaten its spring inventory. Ports' anger with the impasse is also building, with executives becoming increasingly vocal in demanding that both sides reach deals after seeing volumes plunge in January. 

The inability of the Labor Secretary to achieve an agreemnt underscores the depth of animosity that currently exists between the PMA and ILWU, not that anyone needed any more evidence to that effect. It showed further the growing political liability the issue presents for President Obama stemming from mounting nationwide losses among businesses across many industries, including retail, agriculture and automotive.

Obama stood resolutely on the sidelines as the negotiations stretched on for months and even after they turned disruptive in late October with slowdowns by the ILWU and actions by the PMA to curtail vessel operations up and down the coast. Now with the story in the national headlines Obama is forced to act but such is the depth of the hard feelings at the negotiating table — more so than differences on the issues — that even the dramatic entry of the highest U.S. labor official into the negotiations wans't enough to immediately break the logjam. 

The PMA is likely betting at this point that pressure from Washington plays to its advantage. The ILWU resisted and ultimately grudgingly accepted the participation of a federal mediator in early January. The PMA believes it has made the union a generous offer and has argued that case publicly, releasing details of its offer. The union, used to getting its way over many years, upped the ante early in the year with fresh demands relating to the right to fire an area arbitrator, and the PMA balked.