Bid near to buy out pay plan at port

January 26, 1994|By Suzanne Wooton | Suzanne Wooton,Staff Writer

The Steamship Trade Association of Baltimore is close to finalizing an $18 million loan agreement that would allow the port employers' group to finance a buyout of an expensive program that pays Longshoremen when they are not working.

Sources at the port say a lump sum of about $10,000 would be offered to each member of the 1,800-member Longshoremen's association under the buyout. If accepted, the plan could cut labor costs at the port by $12 million a year by 1996.

But the Longshoremen are fiercely protective of the Guaranteed Annual Income (GAI) fund, which has been subsidizing workers' pay at the port for two decades, and an influential union official says members are unlikely to accept such a deal.

"I would definitely be opposed to any single lump-sum payment," said Richard P. Hughes Jr., the president of Local 953 of the International Longshoremen's Association, which represents 400 dockside checkers and clerks who handle paperwork.

Mr. Hughes said the plan would also be rejected by other ILA locals, like the grain handlers and carpenters, whose members are dependent on GAI payments.

The GAI program is intended to compensate eligible workers for wages lost because of automation. Payments from the fund ensure that each eligible worker will make $30,000 a year, about half of what a dockworker with top seniority could earn by working full time.

The subsidy programs, adopted during the 1960s and 1970s by most Atlantic and Gulf of Mexico ports, have been phased out at most ports. Most recently, ILA leadership in Philadelphia agreed to suspend the GAI program for a year at that port, which was losing work to Wilmington, Del. Only the ports of Baltimore; Hampton Roads, Va.; New York; and Boston still have GAIs.

About 500 Longshoremen at the port of Baltimore are receiving GAI benefits. "If we were to accept a buyout, it would just be selling out those guys," Mr. Hughes said.

But the fund -- financed through a $4-per-man-hour assessment on steamship and stevedore companies -- has been criticized as a factor that makes the port of Baltimore less competitive because companies pass those costs on to customers.

"The GAI is certainly one of our biggest concerns about the cost of doing business in the port," said Maurice Byan, president of the trade association, which represents 37 steamship lines, terminal operators and stevedores. "We're always looking at methods to control it."

The deal would require the ILA to reopen its contract negotiations, a prospect that is inviting to neither Longshoremen nor the steamship association. Recently, the ILA voted to extend its contract for two years.

Sources say the employers' group is arranging an $18 million loan through Maryland National Bank to finance the deal. The employer assessments would continue to be collected for at least three years while the loan is being repaid.

Current low interest rates give the steamship association an opportunity to finance such a deal, according to the sources. Eliminating the fund, they say, would attract business to the port, which, in turn, would generate work for unemployed Longshoremen.

Mr. Hughes held out a possibility of some movement on the touchy GAI payments. "I would like to see some of the fund go to subsidize efforts to bring more work here instead of paying the guys directly," he said.

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