BMW to Mazda Imports Slowed as Strike Shuts Baltimore Port

Baltimore’s port remained closed for a second day after 2,000 union longshoremen walked off the job in a contract dispute, snarling imported cargo that included autos from Mazda Motor Corp. (7261) and Bayerische Motoren Werke AG. (BMW)

The closure puts pressure on the supply chain as Baltimore lures auto contracts away from east coast ports in New York and New Jersey. The disruption will hamper sales, said Michelle Krebs, a senior analyst at auto researcher Edmunds.com.

“Auto industry demand has been very strong,” Krebs said today in a phone interview. “We’re in a situation right now where there are a lot of vehicles that are in short supply.”

Mazda would be particularly hurt because it has experienced a “sales renaissance” and was already struggling to fill orders before the strike began, said Krebs. The automaker signed a five-year contract in August that will bring as many as 65,000 vehicles a year to the port from Japan.

“We’re aware of it, and we’re looking into it,” Nick Beard, a Mazda spokesman, said in an interview yesterday.

The Port of Baltimore is the 12th largest in the U.S. by container volume, and one of the top ten employment centers in the state, according to the Maryland Port Administration’s most recent annual report.

Photographer: Rich Clement/Bloomberg

Cranes sit at the Port of Baltimore in Baltimore. The port's closure puts pressure on the supply chain as Baltimore lures auto contracts away from east coast ports in New York and New Jersey. Close

Cranes sit at the Port of Baltimore in Baltimore. The port's closure puts pressure on... Read More

Close
Open
Photographer: Rich Clement/Bloomberg

Cranes sit at the Port of Baltimore in Baltimore. The port's closure puts pressure on the supply chain as Baltimore lures auto contracts away from east coast ports in New York and New Jersey.

The dispute centers on a contract signed by the International Longshoremen’s Association, covering ports from Maine to Texas, which needs to be ratified by all local labor unions. Local 333, one of four Baltimore chapters, rejected the contract and announced a work stoppage on Oct. 15.

Economic Impact

“If an agreement can be reached within the next day or two, we don’t think there will be a huge economic impact,” Richard Scher, a spokesman for the Maryland Port Administration, said in an interview. “If it continues a week or two weeks, then you’re looking at some significant economic impacts.”

Local 333 is protesting the Steamship Trade Association of Baltimore Inc.’s refusal to negotiate “in good faith” over a new contract covering workers terms and conditions, the union said in a statement yesterday.

“Local 333 is eager to enter into a new contract with the STA,” its president, Riker McKenzie, said in the statement. “But the dedicated men and women working at the Port of Baltimore deserve a fair and just contract. We cannot accept STA’s refusal to negotiate over matters that the law requires them to negotiate.”

A representative for the Steamship Trade Association declined to comment.

Fiat, BMW

Chrysler Group LLC, which is majority owned by Fiat SpA (F), is “closely monitoring the situation and hopes for a speedy resolution,” Katie Hepler, a spokeswoman, said in an e-mail.

The automaker, based in Auburn Hills, Michigan, shipped about 124,000 vehicles using the port in 2012, Hepler said. This year it started receiving shipments of the Fiat 500L, a roomier version of its compact 500, through Baltimore, Hepler said.

“Like everyone else who uses the Port of Baltimore we’re hoping the strike is short and that business as usual returns as soon as possible,” Ken Sparks, a spokesman for BMW North America, said in an e-mail. “Baltimore is one of our three ports on the East Coast and of course we always have contingency plans should any location not be available for a period of time.”

Daimler AG’s Mercedes-Benz said about one third of its sales were processed through Baltimore, Donna Boland, a spokeswoman, said in an e-mail.

“It’s our hope that the situation will be resolved in the next few days.”

To contact the reporter on this story: Caroline Chen in New York at cchen509@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.