Hyundai Cargo Line, Hanjin to Ship Offices Outside State

Two of the region’s largest ocean-shipping lines plan to relocate most of their local administrative operations out of state within the next several weeks in what industry observers say is a move to cut costs and consolidate clerical functions and an attempt to elude a powerful labor union working to organize office employees at both companies.

The relocations are expected to affect scores of clerical and administrative workers at Hanjin Shipping Co.’s regional office in Cerritos and at Hyundai America Shipping Agency’s national headquarters in Gardena. Both companies, however, will continue to operate their massive cargo-processing terminals at the Port of Long Beach, and Hanjin will maintain a local sales staff.

Neither company would specify the number of employees that will be affected by the moves, but industry sources said the total could be from 50 to 100.

“They’re certainly trying to run away from us,” said Steve Stallone, spokesman for the International Longshore and Warehouse Union, whose Local 63 Office Clerical Unit last year successfully campaigned to bring eight Hanjin office employees into the union.

Considered one of the West Coast’s most powerful labor organizations, the ILWU represents more than 4,000 dock workers at the ports of Long Beach and Los Angeles, the nation’s leading harbors for container cargo. More than 400 additional workers are represented by the Local 63 Office Clerical Unit, which last year also won the right to put the question of joining the union to dozens of Hyundai office employees but lost the vote.

News of the imminent office relocations has sparked concern at rival shipping lines that Hanjin and Hyundai will soon gain a competitive advantage over shippers with unionized office employees. The ILWU contracts often contain job-security clauses preventing moves out of state and can provide for annual wages starting at $60,000, sources said.

At the same time, some industry observers blamed the union for chasing jobs and company operations out of the state.

“Here we have the nation’s busiest ports and we’re losing flagship offices like this because of union pressure,” said Jack Kyser, chief economist with the Los Angeles Economic Development Corp.

But Stallone said the ILWU is merely trying to save what office jobs are left in the local shipping industry after years of reorganization and consolidation that saw many shipping lines relocate regional offices and headquarters to other states--often right-to-work states such as Idaho and Arizona, where organized labor has less bargaining clout.

“They’re trying to get the cheapest labor they can find,” Stallone said.

Hanjin officials downplayed the influence of union organizing efforts on the decision to relocate.

“I can’t say it didn’t have any bearing, but it certainly wasn’t the reason we decided to do this,” said Ole Sweedlund, vice president of Hanjin’s U.S. headquarters in Paramus, N.J.

In the last few years, major shipping lines such as NYK Line and Matson Container have relocated their regional offices to Boise, Idaho, and Phoenix, respectively, moves that affected more than 100 workers. Industry watchers said the current round of departures is part of the same trend.

“It’s all about cost-cutting and getting rid of duplication in their operations,” said Jay Winter, head of the Foreign Trade Assn. in Los Angeles.

Sweedlund said his company is just weeks away from transferring most of its local clerical and administrative operations to a new office in Phoenix. While he confirmed jobs would be lost during the reorganization, he wouldn’t specify the number. “There will be a fair amount that will be impacted,” he said.

Sweedlund, however, said some employees have asked to follow their jobs to Phoenix, and others have been invited to join Hanjin’s expanding local sales staff.

Hanjin for years has been considering consolidating the operations of its 10 regional offices nationwide, Sweedlund said.

All the offices will be affected, he said, as Hanjin transfers operations such as documentation processing to five new hub offices in Phoenix, Salt Lake City, Chicago, Paramus and a location yet to be determined in the Southeast.

He called the moves part of an ongoing “efficiency project” at the company.

Hyundai, meanwhile, offered few details on its relocation plans. Company official K.H. Choi said Hyundai planned to transfer operations at its national headquarters in Gardena to Denver and Dallas. He would not specify the number of employees to be affected by the move.