Big Stakes in the Auto Talks

A.F.L.-C.I.O. President George Meany, who has just turned 76, last week propounded an unexpected proposition at a celebratory steak-and-martini luncheon with a group of Washington newsmen. "We find more and more that strikes really don't settle a thing," said the titular head of the American labor movement. "Where you have a well-established industry and a well-established union, you're getting to the point where a strike doesn't make sense." By Meany's reckoning, the right formula in such circumstances is for both sides to submit all unresolved issues in collective bargaining to binding arbitration.

His remark might easily have been aimed at the suspenseful negotiations between the nation's largest industrial union, the independent 1.6 million-member United Auto Workers, and its largest manufacturing industry. After seven weeks of preliminary bargaining, General Motors, Ford and Chrysler this week will make separate but almost simultaneous pay-and-fringe-benefit offers to the U.A.W., covering the next three years. The size of the automakers' proposals should provide a good clue to whether there will be an auto strike when the current three-year contracts expire Sept. 14. Company and union men seem to agree that only if the offers are substantial--for example, a 10% or more wage increase in the first year --is there much chance that a walkout will be averted.

Even more than usual, the outcome of the auto negotiations promises to have a large psychological, political and economic impact on the nation. A prolonged strike this fall could easily check a promising upturn in business, spread new gloom among investors and consumers, and raise unemployment to levels higher than it would otherwise reach. A severely inflationary settlement, however, would establish a pattern for 1971, when major union contracts covering about 4,000,000 workers must be negotiated.

Forgotten People. The chances of a strike are heightened by a mood of simmering discontent among the nation's blue-collar workers, who feel themselves victimized by inflation, trapped in unpleasant jobs and neglected by the rest of the U.S. "These men are on a treadmill, chasing the illusion of higher living standards," Assistant Labor Secretary Jerome Rosow recently observed in a much remarked study. "They feel like 'forgotten people.'" Blue-collar workers in many states, Rosow notes, often have incomes only a notch above welfare payments, and they resent being taxed to pay for special benefits accorded the poor, but denied to them.

Testifying recently before a congressional committee, United Steelworkers President I.W. Abel summed up the prevailing feeling of the workers: "It's a mood of great uncertainty, of great frustration coupled with anger, a feeling of some helplessness in the face of what has been happening, a hesitancy about what lies in store for the future." That mood has been reflected in the new militance of labor. Rank-and-file members this year have rejected one contract in eight negotiated by union leaders. And it has not been lost on union members that Chicago Teamsters Local 705, by refusing last May to accept a nationally negotiated hourly wage increase of $1.10 over 39 months, drove both sides back to the bargaining table and got a $1.85 an hour raise as a result.

Emotional Slogan. Among auto workers, the chief expression of discontent with their lot is a powerful movement for "30 and out." The slogan sums up the idea of voluntary retirement at any age after 30 years' service with a minimum $500-a-month pension, a demand pushed through by membership pressure at a U.A.W. convention last spring. Last week a National 30 and Out Committee bought a full-page ad in the Detroit Free Press--somewhat to the surprise of the U.A.W. leadership--to proclaim the idea as "the number one issue" in this year's bargaining.

The rank-and-file aggressiveness arises from a new awareness among auto workers that working conditions have not improved as much as they feel they should have. The assembly line is a noisy, dirty place to work, as it was 30 years ago, and it moves at a fast pace--60 cars an hour for a Ford Torino or Maverick and 100 per hour at G.M.'s new automated subcompact plant in Lordstown, Ohio. For the workers, ordinary human comforts are few; often they have no time in a 15-or 30-minute lunch break to get a sandwich at a cafeteria, which is sometimes as much as half a mile away. "No one wants to go inside the plant in the morning, and no one is sad to leave in the afternoon," says Henry Belcher, 40, a Chrysler body repairman at Hamtramck. "You're as much a machine as a punch press or a drill motor. Your life is geared to the assembly line. I've lost my freedom."

Next to retirement benefits, the union is pressing hardest for increased pay. U.A.W. President Leonard Woodcock, who succeeded the late Walter Reuther, says that the companies would be "getting warm" if they offered an 8% raise. Chances of an early settlement might rise if the automakers were willing to pay the additional 260 an hour that the workers would be earning today had Reuther not agreed, in settling the 1967 strike, to put an 80 an hour limit on the annual cost-of-living raises. The union's third big push is to erase the ceiling on such allowances, which Reuther later called the biggest mistake of his life.

U.A.W. men argue with considerable justice that they need a large pay boost to overcome the effects of inflation and the business slump on their incomes. The annual earnings of the average G.M. worker in 1969 were $9,599, according to the union (G.M. puts the average $28 lower). This sum is at least $478 below what the Bureau of Labor Statistics judges to be enough for an "intermediate"--that is, modest but adequate--standard of living for an urban family of four.

Crisis of Costs. For their part, the companies complain that absenteeism runs as high as 10% on Mondays and Fridays and 15% the day after payday. Sabotage--paint scraped with screw drivers, upholstery slashed--is common. Numerous defects have roused consumer complaints about quality control. Automen complain that hourly pay and benefits have increased nearly three times as much as productivity since 1965. The resulting increase in the price of U.S. cars makes Detroit increasingly vulnerable to foreign competition, which now accounts for 13% of the U.S. market. As long ago as last February, G.M. Chairman James Roche set the stage for a tough corporate approach to this year's negotiations. Proclaiming a "crisis in costs," he declared that "we must restore the balance that has been lost between wages and productivity. We must receive the fair day's work for which we pay the fair day's wage." The companies also insist that fat pensions for all 30-year employees would be prohibitively expensive, probably doubling G.M.'s annual pension costs of $255 million.

Despite the smoldering animosities on both sides, the negotiations so far have proceeded almost as though the U.A.W. and the automen had taken George Meany's proposition to heart. Leonard Woodcock's low-key style is in sharp contrast to Reuther's combativeness. The companies, too, have been less belligerent than Roche's tough words would indicate. At the Norwood, Ohio, Chevrolet assembly plant, workers staged a nine-day go-slow without audible protest from General Motors. Last week a jurisdictional strike halted work at the Lordstown plant, the home of G.M.'s subcompact, the Vega 2300. Normally, says Woodcock, the company would be "kicking and screaming and disciplining right and left. Now they're just taking it. This is unheard of."

Delayed Target. Even if there is a national settlement, enough thorny local issues remain--29,000 plant-level proposals and disputes involving G.M. alone --to assure a number of local strikes, quite possibly lasting into 1971. Last week the first U.A.W. locals to vote were 90% in favor of authorizing a strike, a fair indicator of sentiment in the shops. The union has not yet announced its strike target, but many of Ford's work ers, who struck for 66 clays in 1967, have let union leaders know that this year they consider it the turn of G.M., which has not had a major national strike since 1945. Many Chrysler workers have put "Strike G.M." bumper stickers on their cars, and most Detroiters expect that G.M. will indeed be the target.

Against that possibility, G.M. has cut back on its steel purchases, and all three major manufacturers have postponed introduction of their 1971 models for two weeks. Hedging their bets against an inflationary settlement, the automakers last week posted tentative price increases of 5% to 6% on trucks, suggesting that a similar boost in car prices may be on the way.

"If there is a strike," says Woodcock, "I think it would be longer, rather than shorter." He has warned the union members that they may have to endure an old-fashioned strike, without strike pay. The union has raised a strike fund of $120 million. That is enough to finance eight weeks of strike benefits ($30 a week for a single person, $40 for a family) for the 375,000 workers who would be involved. But some of the fund is tied up in long-term bonds, which the union could only sell at a loss in today's depressed market. Much in the fashion of a big company facing a cash squeeze, the union is trying to arrange a line of credit and to mortgage such assets as its headquarters and its new Black Lake, Mich., family education center.

Whether all the loans will be needed depends to a large extent on Woodcock himself. He understands the damaging impact on the economy of either a strike or an inflationary wage increase. His argument for a cost-of-living escalator is that the alternative is worse: unions would be forced to demand more in anticipation of inflation. "I am concerned about constantly escalating future wage increases further distorting the economy and possibly leading to a major recession, if not worse," he said last week. "If you bargain wages to anticipate inflation, then you're guaranteeing that inflation." That caveat promises some interesting negotiations over the next two crucial weeks.

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