Autos Test an Eerie Peace

In a year when its economic policy generally has been lurching from failure to disaster, the Nixon Administration has been able to take solace from a positively eerie quiet on the labor front. Despite soaring inflation, despite ballooning corporate profits, the big unions have settled one by one for pay-and-benefit gains close to the Administration's 6.2% guideline--and so peacefully that man-days lost to strikes have been running at the lowest rate since 1964. Last week, however, negotiators began moving to the biggest test of whether this serenity can endure. Beaming in front of a brocade curtain in a Milwaukee hotel, United Auto Workers President Leonard Woodcock announced the union's choice of a strike target when contracts expire Sept. 14:Chrysler.

The choice seemed a somewhat, though not totally, reassuring sign that a crippling strike or an inflationary wage settlement will be avoided. The most obvious reason for the selection was simply that Chrysler's turn had come. General Motors was the target the last time around in 1970; Ford had been up the time before, in 1967. Chrysler also would be more financially vulnerable than either GM or Ford to a strike that left its rivals free to go on making cars.

Union leaders, however, said that the biggest reason for the choice was that they are determined to concentrate on "noneconomic" issues, such as better working conditions, rather than pressing for outsized wage boosts. Last month they staged three wildcat strikes, mostly over safety issues and other working conditions. The most important demand is that workers be allowed to refuse overtime. U.A.W. officials say that in preliminary talks, Chrysler negotiators exhibited less of a "knee-jerk reaction" against such demands than GM or Ford officials. Indeed, almost as soon as they were targeted, Chrysler officials expressed willingness to raise wages and benefits an average 6.2% each year of a new three-year pact, though they did not make a detailed offer. Woodcock did not aggressively demand more. He merely said: "I would want to see how they break that down."

Scrappy Scotsman. Still, Nixon Administration officials are nervous. A strike that ended in an inflationary settlement would set a bad precedent for next year. Despite the leadership's focus on noneconomic issues, some U.A.W. locals at all the Big Three companies are clamoring for fat wage increases.

The auto negotiations are almost the last big U.S. labor talks for 1973, but next year union leaders will negotiate new contracts covering about 3.4 million workers in major industries. That makes the bargaining calendar lighter than this year, when 4.6 million unionists had contracts expire, but still far from a snap. The contracts to be signed in 1974 include those covering the steel industry, one of the traditional pacesetters for U.S. wages.

So far, wage hikes have been kept down by two factors. First, most unions negotiating this year have been coming off big three-year contracts that until very recently kept members' pay rising faster than prices. Second, there have been corrections in wage disparities that a few years ago caused some unions to grumble that other unions--and even nonunion men--were outdistancing them in pay gains. Washington officials fear, however, that food-price inflation from now on will weigh more heavily in unionists' minds. Last week's news did nothing to dispel that fear. The Government reported that the consumer food-price index for July jumped .8%, even though prices supposedly were frozen, and Treasury Secretary George Shultz warned that the August increase in the Wholesale Price Index will be "astounding." Even in advance of settling with their unions, auto-and steelmakers are asking for price increases under Phase IV rules; the Cost of Living Council will hold hearings on their requests this week.

A more immediate factor that could trouble the Chrysler talks is the position of Douglas Eraser, a scrappy 57-year-old Scotsman, one of the union's seven vice presidents and head of the Chrysler department. Eraser is a media darling--candid, brilliant and rugged-looking. He was a favorite of many to run for Senator against Michigan Republican Robert Griffin last year, but decided to stay with the U.A.W., where in 1970 he was the losing rival to Leonard Woodcock for Walter Reuther's mantle. The selection of Chrysler as strike target gives Eraser an inside track in the race for the U.A.W. presidency in 1976, when Woodcock must retire because he will be 65, but first Eraser must show that he is a tough negotiator. Though the odds are against a strike, a number of observers claim that just such internal political pressures inspired Woodcock to lead the 67-day strike against GM in 1970.

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