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Negotiations frozen as West Coast shutdown squeezes companies

By SIMON AVERY
AP Business Writer

LOS ANGELES (AP) More than ports from San Diego to Seattle were shut down Wednesday. So were contract talks between West Coast dockworkers and their employers after efforts to bring in a federal mediator collapsed.

With negotiations scheduled for Wednesday canceled, union leaders were contemplating what their next step would be, Steve Stallone, a spokesman for the International Longshore and Warehouse Union that represents some 10,500 dockworkers, said Tuesday night.

The collapse of talks comes just as businesses across the country, from toy manufacturers to auto makers, are beginning to feel squeezed by the shutdown of all 29 West Coast ports, which handled more than $320 billion worth of imports and exports in 2001.

``This is the two-minute warning for the Christmas season. We got hit at the most vulnerable moment,'' said Charlie Woo, founder and chief executive of Megatoys in Los Angeles, which has $750,000 worth of toys in transit. ``The customer wants my stuff, but it's on the water.''

The Pacific Maritime Association, which represents shipping companies and terminal operators, locked out about 10,500 members of the ILWU on Sunday, claiming workers had engaged in an illegal slowdown.

On Tuesday, a federal mediation session fell apart before it began. Union representatives stormed out, saying their employers showed up with ``gun-toting security guards.''

Jim Spinosa, the union's president and chief negotiator, accused the PMA of sabotaging the session. ``PMA's lockout is holding a gun to the head of the American economy and now they move to aim real guns at us,'' he said.

A spokesman for the association said the guards were there to ensure the safety of the association's president and chief negotiator.

``They have been deployed in a very discreet manner, and we would hope the union would understand these circumstances,'' spokesman Steve Sugerman said.

Peter J. Hurtgen, director of the Federal Mediation and Conciliation Services, an independent government organization, said the guards breached mediation protocol.

If the standoff drags on, ``things are not going to be arriving on shelves when they are supposed to,'' said Erik Autor, international trade counsel at the National Retail Federation.

Many merchants have protected themselves by shipping some holiday goods in advance by aircraft. But air shipping is expensive and stores could pass the costs along to customers.

The auto industry relies almost exclusively on container ships because most parts are large.

``A day's worth of disruption is not enough to create enormous concern, but if it extends, yes, there will be some difficulties,'' said Xavier Dominicis, a spokesman for Toyota Motor Sales USA in Torrance.

Sony's electronics unit is considering bringing more goods in by air. Virtually all the Japanese company's products use at least some components from Asia.

Sunkist Growers, a marketing cooperative of 6,000 California and Arizona farmers, expects to lose about $2 million in exports to Asia each week the disruption continues. Air freight is not a competitive option because standard 40-pound fruit cartons are too expensive to send by air, Sunkist spokesman Mike Wootton said.

Railroads and trucking companies that link ports and the rest of the country are also losing business.

Burlington Northern Santa Fe stopped westbound shipments from Chicago to avoid having them stack up on the West Coast. And Yellow Corp., a trucking company in Overland Park, Kan., has seen a drop of 10 percent to 15 percent in its West Coast business, chief executive William Zollars said.

Air freight operators have reason for optimism. United Airlines spokesman Joe Hopkins said there has already been a small increase in cargo business from the Far East to the U.S. mainland in the past couple of days.

In a letter to President Bush, the West Coast Waterfront Coalition, which represents retailers and transportation firms, urged the White House to take ``whatever steps are necessary'' to reopen the ports. Even if the ports reopened immediately, it would take a month for companies to get their supply chains working normally again, said the group's executive director, Robin Lanier.

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