Behind the Fog

The United Steelworkers' President David J. McDonald strode into the elevator of Washington's Sheraton-Carlton Hotel one day last week and growled: "I can tell you one man who isn't going to be President."

"Who's that?" asked a reporter who was in the elevator.

"Adlai Stevenson," replied McDonald.

What had Democrat Stevenson done to offend? He had aggrieved Democrat McDonald by speaking out forthrightly on the steel strike that had dragged on for 116 days until interrupted by a Taft-Hartley injunction, and that threatens to erupt again when the So-day injunction runs out in late January.

Public Disgust. The steel strike, said Adlai Stevenson in a speech to the Institute of Life Insurance in Manhattan, marks "the end of an era. Everybody is agreed that this cannot happen again, that the public interest is the paramount interest, and that irresponsible private power is an intolerable danger to our beleaguered society." To keep it from happening again, Stevenson proposed that Congress arm the President with an arsenal of new antistrike weapons, ranging from boards empowered to make settlement recommendations (present law bars Taft-Hartley boards of inquiry from offering recommendations) to compulsory arbitration if the two sides proved unwilling to "exercise responsibility consonant with their power."

Conservative Columnist David Lawrence, no admirer of Adlai Stevenson, called the proposal "the most significant utterance this year on labor issues by any political figure." Stevenson, said Lawrence, had voiced the U.S. public's deep disgust at the "irresponsible use of economic power." But despite public disgust, despite President Eisenhower's stern admonition before he departed for Asia that "America needs a settlement now," despite the danger than an aroused public might prod Congress into passing drastic antistrike legislation, Dave McDonald and the steel industry's negotiator, Conrad Cooper, broke off negotiations at midweek in another display of stubborn disregard for the public interest. McDonald airily demanded that the steel industry return to company-by-company bargaining (the big steel companies set up an industry bargaining committee in 1956), a demand that nobody took very seriously.

In the Red. Stubbornness and irresponsibility on both sides have blurred the issues in the U.S.'s most momentous labor-management clash since the 1930s, and the Eisenhower Administration has contributed to the blurring. Within itself, the Administration is divided on the steel strike. Labor Secretary James Mitchell favors a settlement on almost any terms, played a behind-scenes role in California Steelmaker Edgar Kaiser's defection from steel's solid front to make a separate settlement (TIME, Nov. 9). Opposed to Mitchell are White House economic counselors led by Presidential Adviser Raymond Saulnier, who insist that the U.S. public has a stake in seeing to it that the settlement terms are non-inflationary.*Largely because of this split, the Administration has failed to explain clearly enough what the strike is about.

The big background fact of the steel strike is the U.S. economy's pressing need for a hold-down on production costs. Round-after round of wage boosts followed by price boosts has brought not only price upcreep at home but also loss of export markets abroad. Western Europe's rebuilt industrial plants, more modern on the average than the U.S.'s, confront U.S. industry with increasingly rugged competition. In late 1958, the U.S., for the first time since the igth century, became a net importer of steel instead of a net exporter.

Against the background of swollen costs and intensifying foreign competition, the steel industry, led by U.S. Steel's Board Chairman Roger Blough, decided to take a stand on two propositions in this year's contract negotiations with the United Steelworkers: 1) increases in wages and fringe benefits must be noninflationary; and 2) collective bargaining must become a "two-way street," with the union yielding management a freer hand in control of plant operations.

Despite loud bargaining noises, the two sides have come comfortably close to agreement on wages (the company's last offer was a 30-c- package increase over three years--to an average $3.40 an hour --which the union says is really 22-c-). But the basic issue was industry's demand for changes in the contract's twelve-year-old Section 2-B, which had deprived the steel companies of the right to change "local working conditions"--practices and customs, varying from one plant to another, governing such matters as crew sizes, the duties of particular jobs, etc.

Under Section 2-B, during the past few years federal arbitrators have prohibited, for example:

P: Bethlehem Steel from contracting scrap-recovery operations at the Johnstown, Pa. plant to an outside firm, although the contractor's operations, using specialized machinery, were far more efficient than the recovery methods Bethlehem had been using.

P: Pennsylvania's A. M. Byers Co. from setting up a centralized maintenance system, although the arbitrator himself conceded that the old decentralized system was inefficient and costly. P:A Republic Steel plant at Gadsden, Ala. from reducing the ratio of boilermakers' helpers to boilermakers, although methods and equipment had changed so drastically over the years that helpers were idle much of the time.

2-B or Not 2-B. At first Blough & Co. demanded a contract clause saying that 2-B would not "restrict the company from improving the efficiency and economy of its operations." Last month the industry eased this demand to a proposal to submit the 2-B issue to a two-man panel (one member chosen by the industry, one by the union) with compulsory arbitration if the panel failed to reach agreement by mid-1960. McDonald refused to consider even this diluted proposal.

The basic 2-B dispute has been befogged by both sides: by McDonald's charges that the steel industry is out to "bust the union," and by the industry's failure to explain its case to the public. But behind the fog, the issues in the steel strike--whether an economy beset by price upcreep will be subjected to another inflationary steel settlement, whether an industry already pressed by foreign competition should accept another upthrust of wage costs, whether collective bargaining is a one-way or a two-way street--still loom in the background, confronting the U.S. Government and the U.S. public with a demand for thoughtful answers.

*Last week American Can Co. and Continental Can Co., Big Two of the U.S. can-manufacturing industry (see BUSINESS), signed new threeyear, 28.2-c--an-hour-more contracts with Dave McDonald's Steelworkers--and promptly announced that can prices would have to go up.

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