SPENCER MICHELS: At 6:00 am at the union hiring hall in San Francisco, dock workers, members of the International Longshore and Warehouse Union, the ILWU, await work assignments mostly at the port of Oakland. It has always been dangerous work.
BERNARR WYATT, Longshoreman: We got these boxes are constantly slamming down on us; we're in these tractors, we're breathing in..we're breathing in this exhaustion. So there's always movement. As we say, "this is a job where you don't get hurt; you get killed."
SPENCER MICHELS: The ILWU contract with shipping companies expired July 1, and although the longshoremen continue working while negotiations drag on, a threat of a strike hovers over the West Coast ports. A port strike, the first in 31 years, would impact far more than the 10,500 dockworkers on the West Coast and the 87 shipping companies involved. 60 percent of the nation's cargo-- $300 billion worth-- annually pass through West Coast ports; everything from food products and electronics to autos.
One study said total business revenue generated by the ports is 7 percent of America's Gross Domestic Product. The stakes for the union and the companies are also enormous. Richard Mead is president of Local 10, and he says the power of the union to control shipping-related jobs is what the shippers want to erode.
RICHARD MEAD, President, ILWU Local 10: They want power on the waterfront. They want to be able to grab a hold of the ILWU, Put a ring through our nose, and just lead us around.
SPENCER MICHELS: "Not so," says Joe Miniace, president of the Pacific Maritime Association, which represents the shipping companies. He says the unions have consistently resisted the introduction of technology that would lessen the number of jobs.
JOE MINIACE, President, Pacific Maritime Assoc.: The overriding issue is technology; it's modernization of the ports and technology is a tool to modernize ports.
SPENCER MICHELS: Union power, technology and the economy are issues they've been battling over at West Coast ports for decades. In 1934, longshoremen struck at San Francisco and other western ports to establish a union hiring hall and to strengthen their fledgling union. Six people died in clashes with the police, and all union workers in San Francisco declared a general strike before the fight ended.
Because of his strike role, Harry Bridges, an Australian- born dock worker, became a leading union figure. The U.S. tried unsuccessfully four times to deport him as a communist. Bridges established the ILWU, and over the years negotiated contracts that brought good wages and protected jobs, even in the face of new technology that threatened those jobs.
RICHARD MEAD: Harry Bridges saw technology for what it was. He came down and explained to us... he said, "Fellows, you can't fight technology. It's coming." He says, "so you got to bring it in, and when you bring it in, you get what you can for it."
SPENCER MICHELS: In fact, union members earn $60,000 to $114,000 or more a year, depending on how much they work. High wages and good benefits were a kind of payoff for the union acquiescing to technology that came in the '60s and reduced employment on the docks.
Bulk cargo, which required a lot of workers to load and offload, was replaced by containers: Big metal boxes that were transported by trucks or rail, loaded onto ships and then offloaded. Fewer workers were needed. Ports like San Francisco that didn't modernize essentially died.
And at up-to-date ports like Oakland and Los Angeles, some Longshore workers became marine clerks, keeping track by hand and by computer of the contents and the movement of the containers. Wherever that work was-- at the dock or where the containers were packed-- the union claimed it had jurisdiction. But just how far that jurisdiction goes is still in dispute. Jim Spinosa is president of the ILWU.
JIM SPINOSA: What the employers want is to continue to advance technology, and we embrace that. And that any new work that would be created through technology would then we'd have an opportunity to do that work. The employers are saying no to that, and that's where the big hurdle is.
SPENCER MICHELS: Now, more computerization and automation is imminent, and some of the work would be done far from the docks. Labor wants those jobs to be union. Immediately, 400 union jobs are at stake. But according to the shipping companies, the future of West Coast ports is at stake as well. The Pacific Maritime Association sponsored a study that found West Coast ports were inefficient compared to many foreign ports in speed and efficiency.
JOSEPH MINIACE: Our facilities today, as we compete in a world market, are probably at best four times behind the European and Asian terminals-- at best. But the shippers are going to get to the point where it's so expensive to ship to our ports they will find alternatives. The biggest worry I have is that possible competitor that's not even here yet, and that's Mexico.
SPENCER MICHELS: The consultants projected that in the global economy, West Coast cargo will double in ten years and then double again. Peter Vandermat is an engineer with the consulting firm JDW.
PETER VANDERMAT: That means that per acre, you know, of port, you're going to need to handle two times, three times, four times as many containers. Just tracking them, moving them, you know, efficiently and effectively, it's going to become, you know, a tremendous management challenge.
SPENCER MICHELS: Vandermat's firm recommends several automated systems to speed things up. For example, a major bottleneck is the gate, where trucks arrive with containers and drivers have to talk with clerks via intercom. Technology already exists, the consultants say, to smooth the flow, according to Tom Ward.
TOM WARD, JDW Group: As the truck drives through that portal, these cameras and a dynamic scale collect all of the information on that truck. They inspect it, they collect the numbers off of it, they read its identification tag, they weigh it, they take pictures of it for posterity and for insurance records.
SPENCER MICHELS: If union members accept such technology, they want to run it, but they are convinced employers have other plans.
RICHARD MEAD: What the employers are saying now is, "we want technology, and whatever new jobs are created out of technology are going to be non-union jobs." And that's where the threat is.
SPENCER MICHELS: Employers contend the union wants to duplicate work already done by shippers elsewhere and transmitted over the Internet.
JOSEPH MINIACE: The union is saying, "If it's on the Internet, that we should be doing that work. And you're outsourcing it to somebody else." Whoever did it, and these are their words, "Whether it be in Japan, Chicago or Sacramento, it has to be redone here. That's our work."
SPENCER MICHELS: While an agreement has been reached on a new benefits package, both sides foresee major economic losses to their members if they lose the battle over technology. But they may not be in that fight alone, because the stakes are so high at a time when the economy is already weak.
Economist Stephen Cohen of the University of California looked at the potential impacts of a dock strike, and found them enormous. For example, he says, the U.S. Businesses are dependent on just-in-time delivery of supplies, and a port strike would completely disrupt that.
STEPHEN COHEN: Companies no longer have big warehouses stuffed with two weeks', three weeks' worth of spare parts and merchandise, so factories are running lean, just in time, which looks to be vulnerable.
SPENCER MICHELS: And Cohen sees an impact beyond American industry.
STEPHEN COHEN: The collateral damage could start with currency markets. If you were a trader in London, you've heard the docks are closing, that is not good news to, say, the Thai economy, the Taiwanese economy, the Indonesian economy, many of which are struggling. "Dump," then look.
SPENCER MICHELS: Such dire predictions coming in the midst of America's war on terrorism have raised concerns in the Bush administration, and fears from labor of government intervention. It's an intervention companies would welcome.
JOSEPH MINIACE: It behooves the administration, whether it be Bush or Clinton, to oversee these operations. There's four million jobs tied to these ports. And if there's any disruption on these ports, we could have an economic disaster.
SPENCER MICHELS: Labor has rallied against what it says are indications from the Bush administration it might intervene. The union claims cabinet-level officials told them the government was prepared to prevent a strike. Officials could invoke the Taft-Hartley Act, forcing workers to stay on the job for 80 days.
Unionists also say the government is considering replacing union workers with the military in the name of protecting the economy in time of war. Publicly, administration spokesmen deny such plans, and say they are just watching the situation carefully.
MARGARET WARNER: The shippers' organization said today it would lock out dock workers and shut down the LA and Long Beach ports tomorrow unless the union submits to arbitration or resumes normal work schedules.