The U.S. auto industry is urging the White House to take action after dockworkers at dozens of ports along the U.S. East and Gulf coasts went on strike for the first time in decades, saying that protracted labor action could cause shortages and supply chain problems.
“More than four million Americans working in the auto care industry count on the steady flow of automotive parts and products through our ports each day to do their jobs,” the Auto Care Association trade group’s president, Bill Hanvey, said in a statement.
“Each day that this strike continues, not only does our industry lose out on hundreds of millions of dollars in business but the nearly 300 million Americans who drive are more at risk on the road as access to service and repair of their vehicles diminishes. We are calling on the Biden administration to take all possible and appropriate steps to facilitate a resolution between the two parties so that Americans across the country can get back to work safely.”
The International Longshoremen’s Association union, which represents 45,000 port workers, was negotiating with a port operator, the United States Maritime Alliance, for a new six-year contract. The port workers, who are seeking more pay and want bans on the automation of ports across the United States, went on strike on Oct. 1.
“A protracted strike will be debilitating to the auto supply chain and set off economic and national security ripples across the country, harming auto communities and consumers,” John Bozzella, CEO of the Alliance for Automotive Innovation, said.
He noted that the ports affected by the strike handled 34 percent of all U.S. motor vehicle and parts trade, worth $135.7 billion last year.
The Motor & Equipment Manufacturers Association, a trade group for auto suppliers, also called on President Joe Biden to force both sides back to the bargaining table.
Barclays analyst Dan Levy said 70 percent of auto parts imports into the United States arrive via the affected ports, although companies likely built up some inventory because the risk of a strike had been visible for a while. If automakers are forced to fly in parts, that could drive up costs.
European automakers, many of which use the ports on strike, would be the most affected, Levy said in a research note.
“The European [automakers] lean heavily on Baltimore for imports and southeastern ports for exports, as most of their U.S. production exposure is in this region,” he said.
Oil and gas shipments to and from the United States will not be affected by the strike, the Department of Energy said in a statement this week, adding that the longshoremen involved in the strike do not handle such materials. The U.S. Department of Agriculture (USDA) stated that it does not expect the port strike to affect the food supply or prices in the short term.
“Our analysis shows we should not expect significant changes to food prices or availability in the near term,” the USDA stated. “Thanks to the typically smooth movement through the ports of goods, and our strong domestic agricultural production, we do not expect shortages anytime in the near future for most items.”
In statements to the media, Biden indicated that his administration is backing the longshoremen in their strike and said he is not looking to intervene by invoking the 1947 Taft–Hartley Act that restricts the activities of labor unions by seeking a court order for an 80-day cooling-off period of sorts for companies and unions to resolve the issue.
“It’s collective bargaining,” the president told reporters on Sept. 29. “I don’t believe in Taft-Hartley.”
