Peace & Good Will

Minutes after Steelworkers' President Dave McDonald and U.S. Steel Vice President John A. Stephens flagged an end to the 27-day steel strike one day last week, reporters were called into their negotiating room in Manhattan's Roosevelt Hotel to hear the news. Said McDonald: no "battle" had been involved in the on-and-off-again negotiations. "This has not been a class struggle. We are just partners who tried to arrive at an understanding."

Delivered with McDonald's best executive-suite air (TIME, July 9), the remark was nonetheless a valid summary of the strike in the nation's basic industry. In the U.S.'s relaxed, expanding economy, big steel and the United Steelworkers had tangled, separated, and then returned to settle their .differences with a minimum of bitterness.

Behind the Scenes. The big sticking points were 1) length of contract--the industry wanted five years, McDonald two--and 2) weekend premium pay. For about a week, as the two sides bargained in Pittsburgh on the issues, the Administration kept to its hands-off policy, leaving it to Federal Mediator Joe Finnegan to help keep the talks going. But when the going got tough, Labor Secretary Mitchell called a secret meeting in Manhattan between McDonald and the presidents of U.S. Steel, Bethlehem and Republic Steel. The Pittsburgh talks were resumed. Then, on July 21, the bargaining broke up. McDonald, his bags packed, prepared to take off on a barnstorming tour of his picket lines.

That same night, the Administration again exerted behind-the-scenes pressure. Mitchell and Treasury Secretary George Humphrey quietly telephoned their personal friends among steel company presidents to urge the steelmakers to be more flexible. Mitchell also sent word to McDonald that running off on a speaking tour would not make a compromise any easier.

Softened Version. Next day the effort paid off. Stephens invited McDonald to meet with him privately at a Pittsburgh hotel. Said he, when the labor leader entered: "Dave, I'm here for an agreement." By day's end the two men had compromised their final difficulty: Stephens cut his five-year contract demand in return for a softened version of the weekend premium plan. In negotiations last week in Manhattan, the technical details were worked out. The major ele ments in the settlement: P: For the industry: a threeyear, no-strike contract, the first in 20 years.

Chief gain: a long period of labor peace and stabilized costs, permitting a planned multimillion-dollar expansion.

P: For the union : the largest wage and fringe-benefit package in its history (45. 6-c- an hour over the three-year period -- -c- an hour the first year, 9.1-c- the next two (prestrike average: $2.47 hourly). Auto matic cost-of-living adjustments, a 52-week, supplementary insurance plan for laid-off workers with two years' service, adding up to the best "guaranteed annual wage" in industry. Premium pay for Sun day work.

Long-Range Health. The settlement leaves both industry and workers in good shape. During the strike, the mills have substantially reduced high inventories, will probably run for the rest of the year at full-capacity level. Many of the strikers had two or three weeks of paid vacation coming, and the companies are allowing them to charge it off against time lost by the strike. With overtime, the strikers will probably be able to make up the rest of their wage loss. On the other hand, the steelmakers will probably raise prices, adding somewhat to the inflationary pres sures on the economy. But the price rise is not expected to have a marked effect on the cost of living. Reason: many manufacturers of consumers' goods, oper ating in a highly competitive market, will have to absorb the price increases.

But pressures or no, the 1956 steel strike symbolized something far more sig nificant for the long-range health of the U.S. economy. For the first time in a major labor dispute, the Federal Govern ment had played a role consistent with the "partnership" theory of labor-management relations. The Administra tion, without public threats or posturing, made it clear to both sides that it would take action in the interests of the econ omy if the shutdown continued much longer. Then, having made its point, it re lied both on economic and moral pressure to bring about a voluntary settlement.

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