05:58 PM PDT on Wednesday, September 22, 2004

By JIM PARKER, kgw.com Staff

The Port of Portland plans to eliminate 81 jobs following a decision by two container shipping companies to leave the port, officials said late Wednesday afternoon.

kgw.com/Port of Portland A containership bound for the far east sits in the Port of Portland.

Roughly 50 workers will be laid-off and 30 other vacant positions will be eliminated. The cuts will amount to a reduction of about 10 percent of the Port's overall workforce.

"The decision to eliminate positions and layoff individuals was an extremely difficult one," Bill Wyatt, the Port's executive director, said Wednesday afternoon. "However, a workforce reduction is critical to reflect the current size of our business and revenue."

In addition, the Port announced initiation of an early retirement program aimed at further reducing the size of the operation's payroll.

Wyatt said the move was needed to "armor the Port against further possible fluctuations in business."

The Port stands to lose two-thirds of its container traffic from last week's pullout of Hyundai Merchant Marine and the impending December departure of "K" Line America, resulting in a $12.4 million operating loss.

Only one trans-pacific container shipping line will remain after "K" Line's exit.

Port of Portland Commission Chair Jay Waldron defended the layoffs as necessary, saying officials had no other choice.

"This is the fiscally responsible thing for the Port to do, as both a business and a government organization accountable to the public taxpayers," said Waldron.

The decision of two container shipping lines to cancel their Portland operations was a substantial blow -- more than $20 million -- to the Port's annual general fund revenue of about $82 million.

Bob Applegate, a Port spokesman, said the bulk of the lost revenue will be in the form of salaries that would have been paid to longshoremen had the lines remained. The net effect on the Port, he said, will be a drop of between $6 million and $9 million -- roughly 3 percent of the entire budget.

"This is not a minor change in circumstances," he said. "It's a major change . . . with no guarantee we'll be able to replace that service and the revenues that came with it."

The Port employed 826 people prior to Wednesday's layoff announcement.

Port officials said some of the employees losing their jobs would be eligible for a severance pay and benefit package along with outplacement assitance.

(The AP contributed background to this report.)