The Pact That Might Have Been

The nation's labor unions long ago perfected the divide-and-conquer tactic of selective strikes in industry-wide negotiations. Only lately have companies tempered union pressure on struck rivals through "mutual-aid pacts." The airlines have used them since 1958, and they have popped up in such industries as railroads and rubber. Last week it became known that the Big Three of U.S. automaking, going into their 1967 negotiations, had considered a mutual-aid model of their own.

News of the secret--and never-used --pact was broken, improbably enough, by the University of Michigan's campus newspaper, the Michigan Daily. Its editor, Senior Roger Rapoport, who had worked in the Wall Street Journal's Detroit bureau last summer, ran a seven-page draft of a mutual-aid agreement that had been prepared last July --two months before expiration of the Big Three's contracts with the United Auto Workers--by General Motors' cost-analysis department.

The proposed G.M.-Ford-Chrysler pact provided that the nonstruck companies would do their best to reimburse a struck rival for up to 40% of its lost production. Were Chrysler to be struck, for example, G.M. and Ford would go into Saturday overtime production to build 12,000 cars (or 40% of Chrysler's weekly production). After the first week of the strike, they would then pay Chrysler $500 per Saturday-overtime car, or $6,000,000 each week. Had the pact been implemented, Ford, which was the only company to be struck during the 1967 negotiations, could have picked up $96 million during the eight weeks in which its production lines were stopped.

As for the Daily's draft, G.M. Chairman James M. Roche would only say that he had never seen it, and that "whatever it is, it is a confidential document and somebody stole it." Actually no more than a working paper, it was probably just one of many strategies that G.M. had routinely considered (as do other companies in other industries) to weaken union pressure.

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