Dulcet Answer

The lights in Room 5-202 of Detroit's massive General Motors Building burned into the dawn one night last week. In that same room two years ago, the United Auto Workers' fiery Walter Reuther and G.M.'s management had cursed each other, touched off the fuse for a costly 113-day strike.

But this time G.M. and the U.A.W. were not exchanging four-letter epithets. They were hard at work on a new kind of contract. To "the U.A.W.'s threat of a strike and demands which totaled 45-c- an hour, G.M.'s grey, forthright President Charles E. Wilson had thought up a surprisingly dulcet answer.

A Floor on the Downside. He proposed that wages be tied to living costs. His offer to G.M.'s 225,000 workers was a flat 3-c--an-hour increase now, plus an 8-c- hourly boost which would increase or decrease as the cost of living rose or fell. If the Bureau of Labor Statistics' consumers' price index rises, G.M. would add 1-c- to wages for each 1.14 points of higher prices.* If the index falls, 1-c- would be subtracted on the same scale. But there would be a floor on the downside; no more than 5-c- would be subtracted during the contract's two-year life. There would be another flat 3-c- boost next May--a first step toward yearly standard-of-living increases.

When the U.A.W.'s solemn Vice President John Livingston saw the offer, he dropped his other demands and snapped it up. The union called the 3-c- annual increase no more than a gesture, but it hailed G.M.'s acceptance of "the principle that prices and profits are a concern of labor."

G.M. had not only averted a strike; it had put Chrysler, Ford and many big parts makers on the spot. G.M. was looking ahead to the return of competitive selling, wanted no breaks in production. This week President Wilson announced that G.M. planned no price changes on its cars as the result of its new wage pattern.

No Lift for Murray. The pattern was promptly adopted by others. Two days later the United Electrical Workers' Jim Matles agreed to a similar contract for U.E.'s 40,000 G.M. workers. That fact seemed sure to have an effect on U.E.'s negotiations at Westinghouse and General Electric. Next day, the lyday Chrysler strike was over. Michigan's dapper Governor Kim Sigler dashed from Lansing to his Detroit office, where Chrysler and the U.A.W. had resumed peace talks. A few hours later, Chrysler and the union agreed on a flat 13^ increase. Ford, which had proposed a wage cut, faced a bargaining date with U.A.W. June 14.

Labor leaders have never liked cost-of-living "escalator" contracts, on the grounds that they tie the worker to a fixed standard of living. But no C.I.O. officer complained about the G.M. contract. Big labor, at last, seemed to. be interested in stability. The only C.I.O. leader who could be unhappy about it was Boss Phil Murray. His steelworkers, tied to a contract which forbade a strike, had got nothing (TIME, May 3, 17). But there was some wistful talk that the steelmakers might pick up the Detroit cue. The prospects for a peaceful labor summer in big industry looked almost rosy.

* Based on 1940s par of 100.2, the BLS index last week stood at 169.3, up more than two points in the last month. Best guess for next month's index: up one to three points.

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