Stalemate at Westinghouse

Negotiations between Westinghouse and its two striking unions came to a surly stalemate. After 17 weeks the two sides were close to an agreement on wages and length of contract, had already agreed to shelve the hot time-study issue for later negotiation. But the sessions finally foundered over the company's refusal to take back 100 workers accused of violence on the picket lines (TIME. Feb. 20).

In desperation, wiry, wily President Jim Carey of the International Union of Electrical Workers (A.F.L.-C.I.O.) last week tried a political gimmick. He persuaded Pennsylvania Governor George M. Leader and four other Democratic governors to propose a fact-finding board to study the major issues. Westinghouse refused to delegate responsibility for its contract to "outsiders." Instead, the company offered to let an accountant compare the terms of its proposed contract with the union's 1955 General Electric contract, make up any difference in benefits. While the differences were being ironed out at the bargaining table, management suggested, the strikers should go back to work.

When the union balked at that, federal mediators tried a new tack: they suggested that they and the fact-finding board, composed of two professional labor arbitrators, work with both sides to settle the dispute. After both sides accepted the mediators' peace-making proposal. Federal Mediator Joe Finnegan pointed skyward and sighed: "If this doesn't work, we will call on third-party assistance from upstairs."

Loyal Dealers. The company's hard-hit dealers, stockholders, customers and 55,000 striking employees were sorely in need of assistance. The longest U.S. strike since 1950 had cost I.U.E. and the independent United Electrical Workers $84 million in wages. The union was paying out $250,000 a week in strike benefits, and Westinghouse had piled up over $250 million in losses. A big question: How long will it take Westinghouse to make up its strike losses, win back its competitive position?

Westinghouse, No. 2 U.S. electrical equipment-maker, would need up to 30 days to start heavy equipment lines, e.g., turbines and generators. But Westinghouse has lost only a "negligible" amount of heavy equipment orders, since most big customers can afford to wait. Westinghouse will also be able to catch up by boosting output in eleven new plants that were picketed before they reached full production. Moreover, said the company. 25 of its 58 major plants are still in partial operation, e.g., the Columbus. Ohio refrigerator factory, where nearly 6.000 striking workers are back on the job.

Although the company will be able to start up appliance production as soon as the strike ends, the big problem will be to recapture the slice of the consumer-goods market that has already been lost to competitors. Example: a Los Angeles chain that normally sells more than 3,000 Westinghouse refrigerators and laundry units a year is receiving only 35% of its normal volume, and is selling General Electric appliances instead. Nevertheless, Westinghouse has kept most of its dealers loyal by stretching inventory, stepping up advertising allowances, and in some cases even supplying them with competitors' products, e.g., lamp bulbs.

Irretrievable Loss. Westinghouse does not minimize its "real problems" in the consumer field. It is well aware that the corporation that manages to sell a consumer his first range or refrigerator usually has him for a customer for keeps, since buyers tend to buy the same brand they bought before. Since Westinghouse has not been able to supply the demand for four months, dealers feel that "Westinghouse has lost this bit of the market irretrievably." However, Westinghouse has gone ahead and drastically restyled its 1956 lines in hopes of selling new customers, is ready to go into full production as soon as workers come back to their jobs. If the company pushes production and promotion, most dealers hope that it will only be a matter of months before Westinghouse is nudging G.E.

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