"Noninflationary" Demands

"This is the great spellbinder," said Michigan's Governor "Soapy" Williams as he defended United Auto Workers' President Walter Philip Reuther to a U.A.W. national convention in Detroit last week. But this time Reuther wove no spell of oratorical magic. What he did do was get 3,200 U.A.W. delegates to approve his 1958 set of demands for the auto industry's contract negotiations opening early in April. Items as approved:

P: A "noninflationary" profit-sharing plan; under this, all company profits (before taxes ) in excess of 10% of capital invested would be sliced up to give 25% to employees (other than executives) and to refund another 25% to auto buyers as rebates.

P: A step-up in the automatic annual hourly wage rate increase (now 2.5%) to a "noninflationary" 3.9% per year.

P: An increase in layoff supplemental pay to assure incomes equal to 80% of regular pay for a full year (v. the present 65% for the first four weeks and the 60% for the next 22).

Reuther had invited General Motors President Harlow Curtice to attend the convention, and debate the new proposals and Reuther's position that the only thing wrong with the country economically is "a serious imbalance" between expanded productive power and lagging purchasing power--correctible in U.A.W.'s case by signing a fat new contract. But Curtice wrote that he could "make our position clear without a personal appearance." The nation, said Curtice, is afraid U.A.W. will make wage demands not "tailored to the economic facts of life." As a start toward restoring public confidence, Curtice asked U.A.W. to renew its present G.M. contract for two years, and stick by its 6-c--an-hour annual wage increase.

From the other members of autodom's Big Three came equally chill words. Chrysler's Lester Lum ("Tex") Colbert sent word that in his view Reuther was proposing to "fight inflation by making a whole series of new inflationary demands." Ford's Board Chairman Ernest Breech, speaking in Nashville, said "giant labor unions, with unprecedented monopoly power." are putting a "steady squeeze on corporate profits and constantly increasing the price for goods and services."

When news of Breech's remarks came to the U.A.W. convention at Detroit's Masonic Temple, Reuther rose and observed that Breech received $565,000 in bonuses in 1955. "If Mr. Breech is entitled to a share of those profits," said Reuther, "then I say the workers are entitled to a share, too."

At week's end uneasy U.A.W. delegates, after approving the Reuther demands, voted to increase strike assessments for March, April and May from $3 to $5 a man, toward raising the $24 million strike fund to $50 million. They hopefully added a feature Reuther had not asked for: in case a strike does not come off, the extra assessments will be refunded. Though there were optimists who believed that under cover of his distinctly inflationary profit-sharing plan Reuther would be able to bring home some more good old-fashioned inflationary pay raises. Detroit generally believed that, with the auto industry in trouble, a lot of U.A.W. members might have to hit the bricks first.

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