Two Lead Change at Ports During Critical Juncture

He’s a former corporate human resources specialist who peppers his speech with mild expressions like “gosh” and “holy mackerel,” a man who had no maritime experience when he took over the West Coast port employers group six years ago.

But as president of the Pacific Maritime Assn., Joseph N. Miniace has emerged as a bare-knuckled negotiator unafraid to back up his words with action -- just as he did Sept. 27 when he locked 10,500 dockworkers out of terminals from San Diego to Seattle.

The lockout -- the first since the PMA was founded in 1948 -- produced the longest work stoppage on West Coast docks since a five-month strike in 1971. It provoked a rare federal back-to-work order under the Taft-Hartley Act, which eventually led to an accord Nov. 1 over the most contentious issue between longshoremen and management: how to roll out labor-saving technology to make the ports more efficient without cutting too deeply into union jurisdiction. The two sides remain far apart, however, on a pension package.

In the weeks leading up to and during the lockout, Miniace made it clear that his goal was to extract concessions on technology to boost productivity. The International Longshore and Warehouse Union has resisted such change for years, he contended, but the future competitiveness of the ports depends on it.

ILWU officials regarded Miniace as the frontman for an ill-concealed attempt to break the union.

Whether Miniace has achieved his goal by instituting the lockout and holding negotiations under government pressure may not be known until a final contract with the ILWU is reached -- or even before the next round of negotiations gets underway less than three years from now.

What is indisputable is that Miniace’s 1996 appointment as PMA president presaged a dramatic change in the dynamics of labor relations on the docks. Union officials say the employers organization has become progressively more confrontational, a change that culminated with the lockout.

That the habitually complaisant employers’ organization would take such a dramatic and costly step shocked port observers. “Not a lot of people believed Mr. Miniace when he said he would lock out” the workers, said Susan Kohn Ross, a Los Angeles attorney specializing in port issues.

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Plans for Lockout

In truth, Miniace had been preparing his membership for the lockout for years. He personally jawboned the top executives of the steamship lines and stevedoring companies that make up the PMA, traveling to corporate headquarters around the world from his San Francisco office, urging the member companies to prepare to take short-term financial losses in return for lasting change on the docks.

“We talked about it at length,” the 56-year-old Miniace said in a recent interview, referring to the discussions he held upon taking office with top executives at the PMA’s most important member firms. “The economic hammer that the ILWU had held over the industry during negotiations has been significant over the last few years.”

The more than 70 shipping lines and terminal operators that make up the PMA, he added, “understand that if they are going to deal with power, they have to have their own power.”

Central to achieving that end has been Miniace’s effort during the last six years to refashion the PMA, long an unwieldy coalition, into a professional organization capable of keeping a united front in talks with the monolithic union.

Lending urgency to his task is the conviction among many association members that it had come out on the short side of the last two contract negotiations.

“In ’96 and ’99 we rolled on every ... thing [the union] wanted and got nothing in return,” said G. Scott Jones, chairman of General Steamship Corp. and a former PMA board member. “The question was, would we have the guts to stand together this time and get things done?”

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Shutdowns Avoided

Even before 1996, PMA sources say, some board members were concerned about what they saw as the PMA’s habit of appeasing the union in quest of labor peace.

The organization had long been dominated by steamship companies for which labor costs were a relatively small part of total expenses, and whose main concern was to avoid shutdowns at any price so that ships and goods could keep moving. Their relative complaisance over labor issues put them at odds with more-militant employers, including terminal operators such as Stevedoring Services of America, whose loading and unloading responsibilities are labor-intensive and thus are more sensitive to wage and union-jurisdiction issues.

“One thing the steamship lines detest is downtime in the harbor,” said Daniel J. Olson, a labor-relations specialist at the University of Washington. In previous negotiations, the PMA’s solid front often had crumbled under pressure from the steamship lines to keep the ports operating.

By the mid-1990s, when the PMA began its search for a successor to President William Coday, the association board “was of the opinion that the industry was going to be challenged, and we needed to take a different approach toward labor negotiations,” said C. Bradley Mulholland, vice chairman of Matson Transportation Co., who served on the search committee.

The steamship business was undergoing a rapid transformation. U.S. companies were being swallowed by foreign-based multinational shipowners. Port volumes were increasing, but a growing share of imports landing at U.S. docks belonged to mega-retailers such as Wal-Mart Stores Inc. and Target Corp., which were using their size and financial heft to exact lower shipping rates.

For the shipping companies, the answer to this margin squeeze was the introduction of new technology, including electronic scanners feeding computer databases, which would simplify the tracking of containers through the ports. They were determined to cut out rules requiring union clerks to reenter by hand data that arrived electronically at dockside, which they saw as featherbedding.

“The union had done well to keep technology out,” Jones said. “We knew we had to break that” and improve logistical efficiency on the docks.

Union observers say the ILWU was not trying to exclude new technology per se, but to ensure that the operators of the new systems remained unionized employees.

“This impasse has everything to do with the classic question of who controls production at the point of production,” Olson said. “Employers want to have unconstrained control, and the unions say this is part of the work of the waterfront and therefore union work.”

The PMA search committee believed that the key to victory in this battle would be to find a president who could unite the PMA’s fragmented membership behind him.

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Skilled Navigator

Miniace seemed to have the right resume. After human-resources and labor-relations jobs at Ford Motor Co. and Ryder Trucks, he had been vice president for human resources at New York University Medical Center from 1991 to 1996. The health-care institution was not only going through wrenching changes -- this was the onset of the managed-care revolution -- but also had a management that answered to numerous and often contentious interest groups.

Colleagues say Miniace was a skilled navigator among the various blocs.

“His personality was a big help,” said Theresa Bischoff, president of NYU Hospitals Center, who was Miniace’s immediate superior. “He was a walk-around leader, meeting many people, ranging from building services to the surgeons in the OR. They really felt he was interested in learning about them.”

In the end, the PMA recruiters considered his ability to communicate with varied masters more important than his lack of experience at the ports.

“He had no experience in the maritime field whatsoever -- and it wasn’t needed,” Jones said. Miniace’s strength instead was his predilection for straight talk. “He would say things very decidedly and not coat the lily.”

With his wife, Giana, Miniace moved to the Bay Area in time to observe the PMA’s 1996 round of labor negotiations, which were handled by the soon-to-retire Coday. He declines to say what he learned from the experience, but PMA sources say he was appalled at the informality of the negotiations and the vagueness of the resulting contract.

Upon assuming the presidency a few months later, Miniace immediately began restructuring the organization from the top down.

“The people who hired me wanted change,” he said. “They wanted the PMA managed as a business. They wanted to change how it managed its labor relations in order to move the industry into the future.”

Miniace’s strategy was to bring top executives of the member companies onto the board -- major decision-makers rather than the local sales and operating executives who traditionally had served as directors. “The financial issues presented by our labor relations needed to be dealt with at the highest levels,” he said.

He spent countless hours mustering support for a unified stance among the employers, unwaveringly delivering the message that they might have to suffer through a short-term shutdown in order to reap long-term gains.

“Joe didn’t wait for the owners to come to him,” Mulholland said. “He went to the owners and met with them to build a trusting relationship, so that if he ever got in a situation like he’s in today they would hold tough, not come apart like they had in the past.”

There was a parallel change, union officials say, in the PMA’s labor relations, which were suddenly infused with a new truculence.

Miniace “came in as very confrontational,” said Steve Stallone, a spokesman for the ILWU. “The idea was he’d be the tough guy on the block. He made public statements constantly bashing the union and he’d bypass arbitrations and try to take us to court. It was a new approach.”

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Growing Hostility

Union leaders say the new atmosphere was exemplified by a 1997 dispute over a ship called the Neptune Jade. The container ship was carrying “hot cargo,” having been loaded in Britain by a company that had fired union dockworkers during a 1995 labor dispute in Liverpool.

When the Neptune Jade steamed into Oakland in October 1997, groups of labor activists threw up a picket line that the ILWU refused to cross. After three days the ship pulled out without being unloaded.

Because the ILWU contract indemnified it from damage claims stemming from such actions, the PMA instead filed suit against individual pickets.

In pretrial depositions, the association tried to force an ILWU protester to identify other pickets, evidently with the goal of adding them to the defendants’ roster.

The PMA also sued to force the ILWU newspaper, the Dispatcher, to give up files identifying the planners of the work stoppage.

The employers lost on both fronts. An Oakland judge ruled that the Dispatcher’s files were protected under California’s press shield laws, and the threat of a walkout soon forced the PMA to drop the rest of its lawsuit.

But the damage was done.

“The litigation was viewed by workers as a hostile act,” Olson said. “There was no gain for the PMA, and a lot of ill will that doesn’t just evaporate.”

Union officials say Miniace brought his confrontational approach into the 1999 contract negotiations, but failed to make it stick. “He didn’t have the backing” from the PMA membership, Stallone asserted.

Union and management sources say he prepared much more carefully for the 2002 contract round. In speech after speech he kept up a drumbeat of warnings that the industry must stand firm during contract negotiations if it were finally to achieve the productivity gains it had been seeking since the mid-1990s.

So far, the PMA has heeded Miniace’s call.

“This group is absolutely, solidly unified,” Miniace said. “I’ve never seen such unity in my life.”