Givebacks and Headaches

By John S. DeMott.

The auto workers' concessions to Ford may be only the beginning

Containing some so-called givebacks of past salary and benefit gains but assuring some job security during the next 31 months, the new contract between the Ford Motor Co. and the United Auto Workers raced through the union ratification process last week like a greyhound chasing a mechanical rabbit. By midweek, the agreement had been approved by the U.A.W.'s international executive board and the Ford unit council meeting in Chicago. Decisive rank-and-file endorsement is this week by the 160,000 U.A.W. members who are Ford employees, with the contract going into effect March 1 .

The fact that only 105,000 of those members are now working explains, in part, the haste of Ford workers to embrace the first contract in their history that settles for less overall than the one it replaces. The Ford agreement was indicative of the troubles facing the 3.7 million members of the U.S. labor movement whose contracts are expiring this year.

Unemployment is expected soon to reach the highest level since 1941, the economy is mired in recession, industrial production dropped by 3% in January alone, and domestic auto sales are running at the slowest pace since the beginning of the Kennedy Administration. Two results of all those woes: Ford Motor Company announced last week that it lost a staggering $136.6 million loss during 1981.

To union men, the worst enemy of all is Reaganomics. Lane Kirkland, president of the AFL-CIO, says that the Reagan Administration is practicing "Jonestown economics," giving "Kool-Aid to the poor and the deprived and the unemployed in this country," a reference to the mass suicide in Guyana in 1978 in which the deadly potion was a soft drink laced with cyanide. After Kirkland made the characterization at the AFL-CIO's executive council meeting in Bal Harbour, Fla., last week, Vice President George Bush, a visitor at the session, accused him of "groping for a headline."

Although Ronald Reagan likes to point out that he was once a union president as head of the Screen Actors Guild from 1947 to 1952, his relations with organized labor have been poor since the beginning of his Administration. Said the council in a particularly bitter policy statement: "The catastrophic economic problems the Administration has created are made even worse by a cruel and regressive ideology that rewards the rich, forgets the jobless, punishes the minorities, ignores the poor and destroys protections for working people." When Reagan insisted last week that some Government indicators hinted that economic recovery was not far off, Kirkland retorted that the Administration was "whistling through the graveyard." The union boss claimed that "if you draw optimism out of that, you are just a blooming bluebird."

Since his new budget was presented two weeks ago, Reagan has challenged critics to come up with better budget proposals if they could, and the labor council last week took him at his word. It approved a set of policies that would, among other items, subject defense spending to a more critical look. Said Kenneth Young, an assistant to Kirkland: "We have always said that we should have guns and butter. This Administration has decided there isn't going to be any butter. It's all guns."

If increased defense spending is approved by Congress, though, the council would not finance it "on the backs of the poor," as Kirkland puts it, but by an income surtax. At least a third of the necessary increase would be paid by corporations and tied to earnings. Said Kirkland: "Defense needs can be met without adding to the federal deficit or cutting food stamps and other already battered social programs." Bush rejected the idea out of hand as nothing less than a tax increase, which the Administration has vowed to resist. Said he: "We are not in favor of a tax increase for defense."

Kirkland called the three-year tax cut passed by Congress and put into effect in October "the most irresponsible fiscal act of our times." Said he:

"It strips this country of resources that it will need to meet the very critical problems of a modern society in a dangerous world." The labor council would cap the individual income tax cuts in 1982 and 1983 at $700 per family, which alone would recoup $20 billion in federal revenues.

The AFL-CIO would get the economy going again by doing precisely what the Reaganauts want to avoid: using new tax revenues to start jobs programs and other initiatives to retrain the unemployed. The union also favors federal loans to depressed basic industries and Government investments in low-income housing, bridges, highways and other parts of the crumbling base of the U.S. economy.

The political clout of unions has been declining for several years, as its membership shrank as a percentage of the labor force, and many of its congressional candidates were defeated. Labor leaders, however, claim they now sense a public restlessness that could turn into an anti-Reagan tide as early as this fall during the congressional elections. Says John Sweeney, president of the Service Employees' International Union: "It is all coming to a head. The President's worst days are ahead of him."

Organized labor is just as interested in this year's labor negotiations as it is in this year's elections. So far, 1982 is turning into the Year of the Concession and the Early Agreement. In January, for example, the Teamsters negotiated their new contract two months ahead of schedule, accepted a wage freeze and fewer cost of living adjustments. Meat packers, fearing loss of jobs to modern nonunion plants in meat-producing areas, agreed to a new contract in December, nine months before their old one was to expire.

Some of the union leaders at Bal Harbour were concerned that the U.A.W.-Ford agreement will worsen the labor negotiating environment. One result of the autoworkers' pact, said William Winpisinger, the militant head of the International Association of Machinists and Aerospace Workers, is that "a lot of companies are asking for givebacks that don't need them." He said the aerospace industry would probably try such tactics, even though "they are the beneficiaries of all the Government spending on defense." Adds the Service Employees' Sweeney: "Every employer who negotiates a contract learns from an air controllers' experience or an automobile concession."

All eyes in the labor movement will now be on General Motors, whose contract with the U.A.W. expires Sept. 14. Negotiations are scheduled to resume in July. In January, GM and the union broke off tentative talks after the union had proposed reducing the prices of cars in proportion to wage and benefit cuts by the U.A.W. One major cause of the breakdown was the fear that workers would not accept any deal that meant a reduction in benefits. General Motors, though, will now be pushing hard to get concessions from the unions. As a result of the Ford deal and another arrangement already in effect at Chrysler, GM will have higher costs of production than the other two major automakers.

The prospects for a settlement at General Motors are not good. Nearly half the GM work force of 330,000 is on indefinite layoff, and relations between the union and management are strained. GM wants to reopen talks, but there may not be much support for that from the rank-and-file union members. Union people complain that General Motors Chairman Roger Smith has a paternalistic attitude toward them. Industry analysts now consider a September strike at GM a real possibility. If GM begins boosting car production in May, despite the current sales slump, it will be a sign that it is preparing for a strike.

That would be disastrous for the U.A.W., the U.S. auto industry and the American economy. The last major auto workers' strike, which occurred in 1970, lasted 67 days and helped cause a general recession. The economy is expected to be heading back toward recovery by next September, but a strike at GM would probably go far to knock it right back down again. --By John S. DeMott. Reported by Gisela Bolte/Bal Harbour and Paul A. Witteman/Chicago

With reporting by Gisela Bolte, Paul A. Witteman

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