UPDATE 2-Imminent threat of labor unrest averted at U.S. Northwest ports

* Grain shippers declare impasse in stalled contract talks

* Companies move to unilaterally impose terms of "final"

offer

* Dockworkers union says members will stay on the job for

now

SEATTLE, Dec 26 (Reuters) - The threat of imminent labor

unrest at four U.S. Pacific Northwest ports was averted on

Wednesday as the dockworkers union said its members would stay

on the job despite "substandard" contract terms being imposed

unilaterally by grain shippers.

Both sides in the stalemate left open the door to further

negotiations. A spokesman for the U.S. Federal Mediation and

Conciliation Service told Reuters the agency was in contact on

Wednesday with the parties.

The shipping companies declared a formal impasse in stalled

contract talks with the International Longshore and Warehouse

Union (ILWU) days after nearly 3,000 rank-and-file union members

voted overwhelmingly to reject management's "last, best and

final" offer.

The contracts at issue cover workers at six of the nine

grain terminals operating in Puget Sound and along the Columbia

River that handle more than a quarter of all U.S. grain exports

and nearly half of U.S. wheat exports.

In calling an impasse after a last, brief round of talks on

Wednesday, the shipping companies also said they planned to

implement terms of their latest proposal, effective at 6 a.m.

local time on Thursday.

The Pacific Northwest Grain Handlers Association, which

represents the shipping companies and grain terminals they own,

stressed the move was not the "lockout" that was widely expected

after management's proposal failed to win union agreement.

Under a lockout, employers typically bar union members from

returning to work, and seek to keep operations running with

non-union replacement workers, until a settlement is reached.

Speculation that grain shippers might take such action was

fueled by union reports that the companies had hired a

Delaware-based company that specializes in providing security

and replacement workers in labor disputes.

The U.S. Coast Guard said in recent days it was prepared to

establish "buffer zones" to keep union-related protests from

interfering with navigation around two of the ports seen as most

likely to be caught up in labor tensions.

"This is not a lockout," association spokesman Pat McCormick

said in a statement. "The companies informed the union that ILWU

members are welcome to come to work under the new terms and

conditions of employment."

STAYING ON THE JOB UNDER 'SUBSTANDARD' TERMS

The companies said that under an impasse, the union

essentially had three choices - to acquiesce and accept

management's terms, to call a strike, or to have their members

continue to report to work under the imposed work rules "but

seek further bargaining."

In a brief statement released shortly after the impasse was

declared the union said it was following the third course, at

least for now.

The Northwest Grain Handlers left open the possibility of

imposing a "defensive" lockout should the union begin to engage

in "intermittent strike activity," a "partial strike," work

slowdowns or sabotage.

Negotiations have stalemated over numerous work-rule changes

sought by the companies to improve efficiency and lower costs

but have been opposed by the ILWU as onerous give-backs

ultimately designed to break the union.

Meanwhile, some 15 container cargo ports on the U.S.

Atlantic and Gulf coasts are bracing for a strike threatened on

Dec. 30 by nearly 15,000 union dockworkers unless shippers

extend their contract.

So far, the ILWU has not asked its members to authorize a

strike, nor has it set a strike deadline or made mention of a

walkout.

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