Reuther & the Maverick

In his negotiations with the auto manufacturers, United Auto Workers President Walter Reuther has always tried to divide and conquer. Historically, Reuther scored many of his best contractual gains by first breaking Ford, then using the Ford surrender terms as the basis to settle with the other companies. But in 1958, Ford stood steadfast in a united front with General Motors and Chrysler, and U.A.W members worked without a contract for almost four months until Reuther finally agreed to none-too-favorable terms. This year, searching for a more promising target than Ford, Reuther focused on up-and-coming American Motors Corp., whose crusading President George Romney disagrees with the Big Three about everything from car design to collective bargaining.

Last week, as the Aug. 31 contract expiration date neared, the Big Three finally made their offers to the union. So complete was Big Three solidarity that a General Motors public relations man was overheard phoning his Chrysler counterpart to tell him that H-hour for the release of the statements had come. The offers were predictably identical: a guaranteed annual 6-c--per-hour pay rise for increased productivity, a continuation of the cost-of-living escalator clause, an increase in unemployment benefits, and a moving allowance for transferred workers.

Other Pastures. Following the time-honored Detroit script, union leaders, expressed shock and anger. "Incredibly inadequate," cried U.A.W. Vice President Leonard Woodcock, chief of the union's G.M. department. Stalking out of the Chrysler meeting, U.A.W. Vice President Norman Matthews, who heads both the union's Chrysler and American Motors departments, snapped: "I'm going where the grass is greener." He headed for American Motors.

American Motors had already behaved like a maverick by offering to share company profits with U.A.W. workers. The profit-sharing scheme--which George Romney prefers to call "progress sharing"--clearly undercut the position of the Big Three. But in return, the Big Three undercut American Motors by agreeing to accept a continuation of cost-of-living and productivity increases--clauses that Romney insisted must be abolished as a condition of profit sharing.

Moving in to take advantage of this split, Reuther himself settled down to secret negotiations with American Motors. At week's end, the company agreed to give the U.A.W. everything it wanted in a new three-year contract: cost-of-living and productivity increases, plus a proviso that 10% of American Motors' pre-tax profits will be paid out to workers (after the top 10% has been skimmed off for shareholders).

Profits in Peace. There was scant chance that the Big Three would agree to profit sharing. Romney, growled Ford President John Dykstra, is "not going to write the contract for Ford Motor Co.'' But the American Motors settlement was bound to put pressure on the Big Three to improve their offer. It was doubtful that the Big Three and the union could reach agreement before the Aug. 31 deadline, and the U.A.W. has vowed that it will not work without a contract. Oddly enough, Labor Day, which falls only four days after the deadline, provides a special incentive for Reuther to temporarily relax his vow. Provided they work both the Friday preceding and the day after Labor Day, U.A.W. workers will draw $10.9 million in holiday pay from the Big Three. With such profits to be gained from peace, it seemed unlikely that Reuther would pull his men out before Sept. 6.

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