Strike?

In a Fisher Body plant at Flint, Mich, last week, a General Motors official tacked up an offer of a $1,000 reward for information leading to the arrest of persons who have damaged 96 car chassis since June 1. These acts of sabotage, plus a rash of wildcat strikes, were symptomatic of the bitterness that has grown between automakers and the United Auto Workers in the two months that they have worked without contracts. Both sides are gearing for the final showdown. Last week the U.A.W. announced that it had secretly polled its membership, found more than 90% in favor of a strike--unless the companies submit to the union's wage-and-benefit demands. This week the U.A.W. executive board will meet in Detroit to set a strike deadline.

U.A.W. President Walter Reuther feels that he has regained some of the tactical advantage he lost two months ago. He has managed to stall contract talks--and keep his members in line--until the 1959 models are getting ready to roll off the assembly lines, a time when a strike will hurt more than it would have in June. Stocks of unsold '58s have been whittled from 900,000 to a four-year July low of 672,000, which is only a two-month supply at current selling rates. (While automakers reduced January-July production from 3,913,043 last year to 2,574,566 this year, six-month sales have gone down at a much slower rate, from about 3,000,000 last year to 2,300,000 this year.) If a strike is called, union plans are to strike one company (most likely candidate: Ford) in hopes that it will buckle and the others will have to follow.

But G.M., Ford and Chrysler still show no signs of breaking their united front, have informally agreed that all will close down if one is struck. While the U.A.W. would undoubtedly cry "Lockout!", the companies have legal precedent, of a sort, on their side.* The companies contend that the U.A.W. cannot afford a strike because unemployment and lagging dues have held the union's strike-war chest at $37.8 million, enough for only six weeks of benefit payments in an industry-wide walkout.

Nothing would damage chances of a fast second-half pickup more than an auto strike. But much as they wish to avoid a strike, the companies are faced with one hard economic fact: a steep wage boost would also mean a steep boost in 1959 car prices--and kill off hope of selling any more cars than in 1958.

* In 1953 in Buffalo, when a union struck one linen-supply company and seven other supply companies shut down in sympathy, both the National Labor Relations Board and the U.S. Supreme Court approved the companies' concerted action.

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