Return of the Glow

The steel industry's ingot output last week hit a surprising total of 78.9% of capacity, or 2,233,000 tons. This was nearly 20% better than anticipated and close to the 2,252,000-ton output in the last pre-strike week. As the glowing ingots moved from soaking pit to rolling mill and out to customers, the glow spread through the U.S. economy.

First to be warmed was the railroad industry. Freight-car loadings jumped 14% for the week to 638,408 cars, the largest traffic since the 697,633 cars loaded in the last week of June. Even the steel industry's biggest and hardest-hit customer, the auto industry, began to thaw. General Motors, which had shut down its plants, began to call workers back to resume making parts. Ford put its operation on five days, and scheduled overtime on the Falcon, Thunderbird and Lincoln. (But Chrysler laid off more workers, stopped production of its Valiant.) With American Motors and Studebaker-Packard also operating five days, the industry's output for the week was 67,100 cars, up from 64,233 the week before. In midweek the year's production to date crossed the 5,000,000 mark.

But a good many effects of the strike still remained. In steel towns across the nation, merchants reported steelworkers were paying off debts and replenishing savings before resuming buying. The biggest strike effect was on the national budget. At Augusta, Budget Director Maurice H. Stans informed President Eisenhower that lowered corporate tax collections traceable to the strike would turn the expected 1959-60 budget balance into a deficit.

New Offer. The loss to the Government will be greater if the steelworkers walk out again Jan. 26. as they promise to do unless a contract is signed. Trying for a settlement, the eleven-company negotiating committee secretly submitted a better offer while negotiations were recessed. The new offer 1) raised the management proposal on wage increases and fringe benefits slightly (to 30-c- an hour by the companies' reckoning, spread over three years); 2) increased cost-of-living increases to a maximum of 8-c- v. 3-c- previously offered, and 3) proposed a two-man union and management committee to try to solve work-rule problems. If no agreement is reached by June 30, the questions will be submitted to arbitration.

Steelworkers' President David McDonald dismissed the offer as "the same old package," insisted that by the union's figuring the actual cash value of the offer was still no more than 24 -c-. As for the softer approach to work-rule reform, McDonald said it only made it clearer that the companies were out to take away "our hard-fought gains."

Old Warning. Formal mediation meetings will be resumed after Thanksgiving, but unionists feel that the companies' offer is not likely to be materially raised. If not accepted by the union leadership, the Taft-Hartley law requires submitting management's final offer to a secret-ballot membership vote between Jan. 5 and Jan. 26. After that, the union leadership could still order the men out on strike again, whether the vote was favorable or not.

Keeping the heat on management, Steelworkers General Counsel Arthur J. Goldberg last week sent a letter to Commerce Secretary Frederick H. Mueller, urging that the Government stockpile steel now coming from the mills as a hedge against resumption of the strike. "While I have not abandoned hope that a settlement will be reached before the 80-day injunction expires, nevertheless I must advise you in all candor that at the present writing no settlement is in prospect."

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