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U.S. vehicle shipments threatened as strike idles Baltimore port

Mazda, Fiat, Mercedes, BMW vulnerable

New vehicles parked at the port of Baltimore in July 2011. A strike has idled the port, threatening Fiat, Mercedes, BMW and Mazda shipments. Photo credit: BLOOMBERG FILE PHOTO

UPDATED: 10/16/13 8:06 pm ET - details added

NEW YORK (Bloomberg) -- The port of Baltimore, which handles Mazda, BMW, Mercedes-Benz and Fiat vehicles and was the No. 1 U.S. port for automobile cargo last year, ceased operations as workers from the International Longshoremen's Association began a strike over a contract dispute with the Steamship Trade Association.

The port is the 12th largest in the United States by container volume, and one of the top ten employment centers in Maryland, according to the Maryland Port Administration's most recent annual report.

The facility handled 538,000 vehicle transfers in 2011 and 652,000 last year, according to the port's Web site.

"We are closely monitoring the situation in Baltimore and we hope for a speedy resolution there," Chrysler-Fiat spokeswoman Katie Hepler said.

The automaker 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.

Mazda Motor Corp. signed a contract this year with the port of Baltimore to ship 65,000 vehicles through the terminal annually.

"We're aware of it, and we're looking into it," said Nick Beard, a spokesman for Mazda.

The strike comes amid a steady rise in U.S. vehicle sales.

"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," said Ken Sparks, a spokesman for BMW North America. "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 U.S. sales were processed through Baltimore, said spokeswoman Donna Boland.

"It's our hope that the situation will be resolved in the next few days," she said.

"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."

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 discord centers on a contract signed by the ILA this year, covering ports from Maine to Texas, which needs to be ratified by all local labor unions, said Richard Scher, a spokesman for the Maryland Port Administration.

Local No. 333, one of four Baltimore chapters, rejected the contract and announced a work stoppage last night, according to Scher, who said the Port Administration isn't involved with the negotiations.

"If an agreement can be reached within the next day or two, we don't think there will be a huge economic impact," said Scher. "If it continues a week or two weeks, then you're looking at some significant economic impacts."

The ILA and the U.S. Maritime Alliance agreed to a new labor contract in February after a dispute over payouts drove the union to the brink of a strike in December before federal mediators secured an extension.

Phone calls to Riker McKenzie, president of Local No. 333, and the Steamship Trade Association weren't returned.

David Phillips and Sean Gagnier of Automotive News contributed to this report.

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