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Posted at 12:25 p.m., Friday, October 4, 2002

Progress reported in dockworker talks

By Rip Watson
Bloomberg News Service

WASHINGTON A federal mediator and a union official said progress was made during negotiations to end a West Coast port shutdown that has snarled shipping and threatens to slow the economy.

"Some" progress is being made in talks between a dockworkers union and shipping companies, mediator Peter Hurtgen said during a break in negotiations in San Francisco.

International Longshore and Warehouse Union President James Spinosa said, "We would hope it could end today, if we could reach an agreement."

Shares of retailers including Wal-Mart Stores Inc. and J.C. Penney Co. rose on optimism that dockworkers would return to their jobs, said Marty Bukoll, an analyst at Northern Trust Corp., whose holdings include Wal-Mart.

The shutdown has closed 29 ports from Washington to California. The lockout may cost the U.S. economy as much as $19.4 billion if it lasts for 10 days, according to a study consulting firm Martin Associates prepared for shippers.

Automakers have slowed production because of the shutdown, and retailers have sent shipments to different ports.

A letter sent to the White House by 51 groups representing retailers, farmers and manufacturers asked for help to end the lockout. Signing the letter were the Toy Industry Association, representing companies including Mattel Inc.; the American Farm Bureau Federation; and the International Mass Retail Association, whose members include Wal-Mart.

"It is now a foregone conclusion that manufacturing plants are shutting down, perishable agricultural products are spoiling and that sales will be lost at retail this coming Christmas season," the letter said.

The trade groups are pressing the White House to invoke the Taft-Hartley Act. Under that law, President George W. Bush can order that the ports open for 80 days. Spinosa, the union president, said negotiations should continue.

"We would like the president and legislators to step back," Spinosa said. "We're in mediation here. We're trying to get this job done."

The trade groups' request was directed to Bush's economic policy adviser, Larry Lindsey. Asked about the potential for a meeting, White House spokeswoman Claire Buchan said Lindsey would be "a natural" person for the groups to approach. The White House has urged the two sides to resolve the dispute quickly.

General Motors Corp. and Toyota Motor Corp. have stopped production at a California auto plant. No. 1 U.S. railroad Union Pacific Corp. said the port shutdown was cutting sales by as much as $5 million a day. The Consumer Electronics Association, whose members include Microsoft Corp., said a prolonged lockout could cut consumer electronics sales by $22 billion this year.

Yesterday's talks were the first under the supervision of Hurtgen, the federal mediator. The shutdown started a week ago, when shipping companies locked out the dockworkers. More than 10,000 union members had worked without a contract since July 1.

The shutdown's effects continued to spread around the world. In Asia, Toyota, Honda Motor Co. and automakers such as Hyundai Motor Co., South Korea's biggest, began airlifting parts to keep their U.S. plants running. In Europe, dockworkers may join the dispute by boycotting some vessels, said Kees Marges of the International Transport Workers' Federation.

Shipping delays may harm growth in Japan, Hong Kong and Singapore in the wake of a 2001 slump, economists said.