Collision Course in Detroit

A FAMILIAR collective-bargaining ritual was played out in Detroit last week. Just 13 days before the deadline for a strike that could powerfully affect the future course of the nation's economy, the Big Three automakers simultaneously presented their first cash offer to 700,000 members of the United Auto Workers. Union leaders angrily rejected the nearly identical proposals as much too little. On the surface, at least, the disparity between offer and expectation seems to increase the chances for an auto strike when the industry's current three-year contracts expire next week.*

Much of the disparity arises from differing interpretations of a curiously ambiguous clause in the agreement that ended a 66-day U.A.W. strike against Ford in 1967, and that subsequently was adopted by other companies. The strike revolved in part around a cost-of-living allowance that raised workers' wages along with the Government's price index. The union agreed to an 8-c--an-hour annual ceiling on the amount by which workers' pay might increase to offset inflation. Any difference between that amount and what the workers could get if there were no ceiling, the agreement read, "shall be available" at the beginning of a new contract in 1970. To the union, that difference--now amounting to 26-c- per hour for the average worker--is simply accumulated back pay. To the companies, it merely requires an offer of at least 26-c- an hour in the current negotiations.

Something Old, Something New. As they see it, the companies have met that obligation. Their offer provides for an immediate 7 1/2% increase of 27-c- an hour for a typical U.S. auto worker making $3.59 an hour in base pay. In the second year, he would get another 11.5-c- per hour, and in the third year 12-c- more --amounting in all to a raise of 14%, or 50-c- an hour, over the three-year contract term. Higher-paid craftsmen in the auto industry would gain more --48-c- per hour in the first year, for instance, for skilled workers now earning $6.46. General Motors placed the cost of the package at $1.4 billion for wages alone, and called the offer "the largest economic proposal" in the company's history.

To the union, the automakers' proposals amount to much less. "Essentially a hiccup," scoffed Irving Bluestone, the chief U.A.W. bargainer at G.M. Counting the disputed 26-c- as "old money," the U.A.W. calculates the first-year offer of "new money" at no more than an average 3-c- per hour, or .75%. The union has hinted that a pay-and-benefit increase of 8% plus the catch-up 26-c- would be acceptable. That would amount to an increase for the average worker of roughly double the industry offer.

The two sides are hardly closer to agreement on another major union demand: removal of the limit on cost-of-living increases. Getting the union to agree to the ceiling "cost us half a billion dollars" in lost revenue during the 1967 strike, said Ford Vice President Malcolm L. Denise, and "we're not disposed to throw it over lightly." The companies did offer pension increases, but not the "30 and out"--voluntary retirement at any age after 30 years of service on a minimum pension of $500 a month--that is the most emotional issue among union members. Under G.M.'s plan, pensions would increase 23% to $202.50 for a worker retiring at 65, and 25% under an early retirement provision beginning Jan. 1, 1972. At that time, a 60-year-old worker with 30 years of service could retire with a pension of $500.

"Not the Last Word." The companies also made some demands of their own, most notably that employees share future increases in medical and hospital insurance costs, at present paid entirely by the automakers. They also proposed that new workers start at wage rates "significantly below" those of established employees. Chrysler's written offer explained why: "During 1969, one of every two new hires left the corporation in less than 90 days . . . the probationary period. [Their] absentee rate was 18.6%. This absenteeism and turnover is costly to the corporation."

Considering the militant mood of many auto workers, the union's prompt rejection of the companies' offer could hardly have been a surprise. The 25-man U.A.W. International Executive Board named both G.M. and Chrysler as possible strike targets, eliminating only Ford, which bore the last strike in 1967. But there was a measure of hope in the comment of G.M. Vice President Earl Bramblett, who heads the corporation's negotiating team with Labor Relations Director George Morriss, that the offer was "not the last word." That ambiguous phrase left the union--as well as millions of other workers and businessmen who would be hurt by a strike--wondering just how pleasant the final word would be.

* The U.A.W.'s contract with American Motors runs until Oct. 16.

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