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West Coast Ports Dispute Caused Collateral Damage, Labor Secretary Says
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West Coast Ports Dispute Caused Collateral Damage, Labor Secretary Says

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West Coast Ports Dispute Caused Collateral Damage, Labor Secretary Says

West Coast Ports Dispute Caused Collateral Damage, Labor Secretary Says
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Renee Montagne talks to Labor Secretary Tom Perez, who worked closely with the dock workers' union and port owners to negotiate a tentative settlement at 29 West Coast ports.

RENEE MONTAGNE, HOST:

There is one union that stands out as particularly strong in this new economy. A nine-month standoff between the longshoremen and the owners of the 29 West Coast ports brought international trade that depends on those ports to a virtual halt. A fleet of cargo ships collected in the waters off the ports; truckers were stalled on land; produce rotted in deliveries missed their deadlines. Operations were disrupted for all kinds of businesses, from California citrus growers to Midwestern automakers to makers of the little red envelopes for Chinese New Year. Finally, President Obama sent in his secretary of labor. And late last week, a settlement was reached, one expected to be approved by the rank and file. When I sat down with Labor Secretary Tom Perez, I asked him what the sticking point was.

U.S. SECRETARY OF LABOR TOM PEREZ: The challenge was that they were stuck on one primary issue, and that was the issue of arbitration. Arbitration is very important because time is money. And if there's an issue of, say, worker safety at the ports and there's a dispute, you need an arbitrator on the site and you need a fair process. And they were stuck on what the process should be. We were monitoring this every day, and we made the judgment. The president said it is time to go in there because the ripple effect of what's happening at the ports is being felt throughout the country, and we can no longer afford to wait.

MONTAGNE: Was there a key argument you made to get the unions and the port owners to agree, again, after such a long time when they couldn't agree?

PEREZ: There is so much collateral damage occurring. And I told them that I am neutral about how they resolve this dispute, but the president is anything but neutral about how fast they resolve this dispute. It has to be done yesterday. You are playing with fire because - yes, the West Coast ports have the advantage of location, location, location. But you know what? Location, location, location is not enough if you have a bad reputation, reputation, reputation in the world in which we currently live, with the Panama Canal about to be widened, with Mexico contemplating the construction of a port, with a rail line to Texas. Vancouver had their best year ever at their port and they're poised to do even better. And by the way, I never got a call from the mayor of Savannah about this because the mayor of Savannah is really excited because you know what? Their business is thriving in part as a result of the port slowdown. And so that was really, I think, in the end what both sides realized.

MONTAGNE: Did the president consider the Taft-Hartley option, an injunction forcing workers back to work?

PEREZ: No, he didn't because the first prong of the Taft-Hartley injunction is that there must be a strike or a lockout. The ports were not fully functional, but there's no doubt that there was no strike and there was no lockout. I'm frequently asked that question, and it's a very important and logical question. I think the bigger threat, which led to this settlement, is market forces. In 2015, businesses have options. And I spoke to the director of global supply chain management for a very large retailer who shall go unnamed, and they said what all others have said, which is that we will not allow ourselves to be held hostage by this, and we're going to diversify our supply chain. So we not only have to restore full operation to the ports now, but we have to restore confidence.

MONTAGNE: How do you prevent a labor dispute like this from, one, happening again and also disrupting what is now clearly a global economy?

PEREZ: I think they have to start the negotiations earlier. That would be my first recommendation. And I think both sides need to come together around a shared vision of how we can transform the ports into the most efficient set of ports in the country. It's been my experience that when you build those partnerships between labor and management - and I've seen it in the auto sector - I watched the UAW and Ford Motor Company come together during the depths of the recession. And the collaboration between labor and management has made Ford one of the most remarkable companies in the world. I think the same thing can happen in the West Coast ports.

In talking to some of the union members, they have some fantastic ideas about how to make the ports even more effective. In my theory, and the privilege I've had in doing my jobs over the years, people who are in the front lines of any organization are people who have some of the best ideas for how to transform that organization. And I think they can come together, and I think they will come together around a shared vision of how we transform the West Coast ports into the most efficient and the most effective ports in the world because that's how they take advantage of their natural location, location, location and make sure that they have reputation, reputation, reputation.

MONTAGNE: U.S. Secretary of Labor Tom Perez helped to negotiate the deal that has reopened ports up and down the West Coast. Thank you very much for joining us.

PEREZ: Always a pleasure, Renee.

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