Rail Strike’s Full Effect Yet to Be Felt : Labor: Businesses warn of factory closures, shortages and financial losses if the dispute continues for more than a few days.

Most of the nation’s businesses emerged unscathed from the first day of the nationwide railroad strike Wednesday, but companies warned of serious factory closures, shortages and financial losses if the railways remain closed.

“If it goes more than a week, we might begin to experience shortages,” said Dick Lovell, a spokesman for the Kellogg Co. in Battle Creek, Mich. However, for now at least, the cereal maker is well stocked with grain at its plants.

Railroads haul about 40% of domestic freight and transport most of the nation’s automobiles and auto parts, coal, food and chemicals.

The nationwide rail strike could cost the economy as much as $50 million a day initially, according to the Assn. of American Railroads. After two weeks the cost could rise to $637 million a day, with up to 500,000 industrial workers idled.

The first day of the labor-management dispute that paralyzed the rail system provided a few hints of the possible disruptions to come: Some Kentucky coal mines were idled, a parts shortage forced an Indiana Gener;l Motors plant to send workers home early, and thousands of cartons of California citrus were stuck in rail cars that went nowhere.

The stranded oranges and lemons are “not getting any younger,” said Laurence Stern, director of transportation for Sunkist Growers.

In California, the state’s three major railroads--Santa Fe, Southern Pacific and Union Pacific--ordered all trains sidelined, leaving customers ranging from beer breweries to oil refineries looking for alternative transportation.

The railroads ordered the shutdown as part of an industrywide show of unity after the union representing machinists ordered a selective strike against CSX railroad.

“We are bringing trains into the terminals and then shutting things down,” said Michael A. Martin, public affairs manager for Santa Fe Railway.

The paralysis of the rail system has also backed up other forms of transport. Many West Coast ports--from Los Angeles to Seattle--depend on the railroads to move a large chunk of the cargo at those facilities. At the Port of Oakland--the second busiest on the West Coast--about 60% of the arriving cargo leaves by rail.

Operators of the shipping lines and terminals at the Port of Oakland say that after about three or four days, they will begin running out of room. Some time-sensitive cargo can be sent out by truck, but the heavy demand for trucks to make up for the lost rail car space has made that option very expensive.

A rail strike of more than a few days carries the potential for serious disruption of the nation’s industrial network, which uses the railroads for much of its shipments of raw materials and parts to factories.

The greatest havoc could be wrought on the auto industry and its suppliers. Its vulnerability has been heightened in recent years by cost-cutting moves to slash inventories, leaving factories with just a few hours’ worth of stock.

The country’s largest corporation, General Motors, appeared to be most vulnerable among the auto firms. On Wednesday, a parts shortage related to the rail strike forced GM to send workers home three hours early at its Ft. Wayne, Ind., pickup truck plant.

GM said the strike would affect 25% of its car production capability by today and 50% within 72 hours. The company would not say whether it expected shutdowns, slowdowns or both. “We do urge Congress to put an end to this,” said GM spokeswoman Antonette Simonetti.

Chrysler Corp. said it has lined up extra trucks and can operate normally for at least two days. “After that we’ll be in big trouble, but so will everyone else,” said a spokesman.

Both GM and Chrysler, however, said inventories of completed cars are at normal levels and most car buyers would not be affected by a short strike.

Although many agricultural products are most commonly shipped by truck, several major crops depend on rail transportation. In California, only about 10% of the perishable produce is shipped by rail, and much of that during the winter season when the rest of the country depends on California’s crops.

But by far the most significant crops dependent on rail transportation are grains, and across the plains of America today, the harvest of hard red winter wheat is under way.

Wheat growers, shippers, processors and marketers say that if the shutdown lasts more than a few days, the effect will be widespread. Some of the country elevators are too small to store more than a day’s worth of grain. Grain left outside is vulnerable to spoilage.

At the Union Equity Cooperative Exchange in Enid, Okla., the effects of the shutdown were already showing.

The exchange, which counts operators of more than 1,100 grain elevators among its membership, is one of the country’s largest exporters of winter wheat. Hard red winter wheat is the major wheat variety and is used in products ranging from breads to cereal and animal grains.

“We’ve got trains loaded at the (grain) elevators that need to go to mills and for export. They are sitting and will not be pulled,” said Darrell Wallace, vice president of transportation for Union Equity.

Times staff writers Andrea Maier, Donna K. H. Walters and Donald Woutat contributed to this report.

Economic Impact of the Rail Strike

WHAT HAPPENED

A strike by an East Coast machinist’s union against CSX Corp., the nation’s third-largest railroad, has brought Amtrak and freight service to a halt across the country.

WHO’S STRIKING

The International Assn. of Machinists said it decided to strike CSX after more than four years of talks because the union thought it would have minimal impact on passengers and shippers.

WHY THE NATIONAL SHUTDOWN

A group of 40 freight railroads voluntarily shut down in response to a strike against CSX. The shutdown forced Amtrak to halt passenger service in most of the country where its trains run on track owned by the freight carriers.

HOW MUCH MOVES BY RAIL

Here is the breakdown of how the nation’s freight moves between cities, including petroleum products moving through pipelines.

Rail: 37.6%

Trucks: 25.6%

Oil pipeline: 20.4%

Water carriers (inland, including Great Lakes): 16.0%

Airlines: 0.3%

Calculated in “ton miles,” a ton of freight moved one mile.

Does not add up to 100% because of rounding.

CARGO AND THE ECONOMY

Economy: Mail, food, coal and grain all move on the nation’s rails. The Bush Administration estimates that the economy will lose $1 billion every day the strike continues.

Autos: The Motor Vehicle Manufacturers Assn. says the stoppage could shut down the entire industry within a week.

Layoffs: The freight line Conrail said 300,000 workers in the auto, steel and chemical industries face immediate layoffs. The Administration says a rail strike would lead to up to 180,000 layoffs within two or three days and 570,000 layoffs in two weeks.

SALARY COMPARISON

Railroad employees earn the highest average annual salaries among transportation workers and are seeking raises ranging between 18% and 20% over the next three years.

Railroad: $42,809

Airline: $33,544

Barge and ship workers: $31,749

Trucking and warehousing: $24,714

Bus (local and long distance): $17,782

Sources: Commerce Department, Times wire services

* MAIN STORY: A1