Costly from Any Point of View

In the days leading up to the in evitable strike, the auto industry seemed to have only business-as-usual on its mind. The Ford Motor Co., which United Auto Workers President Walter Reuther had singled out as his initial strike target, was showing no interest in round-the-clock bargaining. At General Motors, where the threat of a strike was not so immediate, officials cheerfully predicted 1968-model sales of over 9,000,000 cars, up from an estimated 8,600,000 during the current model year. And throughout the industry, automakers went about introducing their new models (see following story) with the usual flourish.

Eleventh-Hour Appeal. Reuther's men seemed scarcely more troubled than the companies. At Ford's River Rouge plant, workers showed up for their last shift in a festive mood that resulted in several stoppages on the assembly lines. The first of the U.A.W.'s 160,000 Ford employees walked off more than eleven hours before their old contract expired. The strike was almost anticlimactic, even though it closed down 93 Ford plants in 25 states. Reuther announced the walkout shortly after midnight, then went home to nurse a case of laryngitis he had picked up in eight weeks of futile negotiations. When payday rolled around, many striking workers simply went to company parking lots, where Ford had the payroll waiting in armored trucks.

With the two sides expected to resume their talks this week, bargaining will have to start almost from scratch. Still on the table is a two-week-old Ford offer that would raise wages and benefits by about 4% in each of the next three years; wages would go up by 130 an hour the first year, about 110 an hour during each of the next two. That would gradually raise the typical Ford worker's weekly base pay, at present $146, to about $160. The U.A.W. has called for annual wage-benefit increases of 6%, which would boost weekly income to about $174. So far apart are the two positions that Ford did not even bother to sweeten the pot with a last-minute offer.

For his part, Reuther insisted that wages must "reflect productivity," refused to budge on his money demands unless Ford agreed to turn over to him its figures on output per man-hour. It was largely Reuther's desire to get this information that inspired him to make an eleventh-hour appeal to submit the dispute to arbitration. A three-man panel, Reuther suggested, would impose a binding settlement after taking into account "productivity and profitability," as well as "the equity received by Ford executives and stockholders." Dismissing such considerations as "beyond the scope of collective bargaining," Chief Ford Negotiator Malcolm Denise predictably rejected the notion.

An even more persistent Reuther theme was that the Big Three automakers were engaged in a "collusive conspiracy" masterminded by G.M. What particularly bothered the U.A.W. chieftain was the refusal by G.M. and Chrysler to extend their union contracts be yond last week's expiration date. While assuring the union that his company had "no intention to lock out its employees," G.M. Vice President Louis G. Seaton declared flatly: "There is no possibility of settlement. Therefore we will not extend the contract."

As Reuther knows only too well, the lack of contracts with G.M. and Chrysler frees those companies to hire and fire at will. It also suspends payroll deductions for union dues, enables the companies to ignore seniority rights and normal grievance arbitration procedures. Beyond that, by making the U.A.W.'s constitutional ban against wildcat strikes inoperative, the contract expirations will no doubt encourage union militants to stage local walkouts. Any production curtailment at G.M. or Chrysler would ease one of the main pressures on Ford to come to terms.

Sticky Issues. What seems like airy nonchalance on the part of the Big Three may actually reflect their satisfaction over Reuther's ticklish position. Nonetheless, an end to the industry's labor strife seems uncomfortably far off, one reason being that the union, as G.M.'s Seaton complains, has yet "to put priorities on its mountain of demands." Besides his wage demands, Reuther has raised such sticky issues as a "guaranteed annual income." And even when a settlement with Ford is finally achieved, the U.A.W. will have to deal with Chrysler and G.M.--where strikes could also develop, if not over national issues, then over almost countless local problems.

The U.A.W. has a strike fund amounting to $67 million, enough to keep its Ford workers on benefits (up to $30 a week for a married man with children) for more than three months. Faced with that drain on its treasury, the union is preparing to raise strike assessments for workers still on the job from $1.25 to as much as $21 a month. As for Ford, sale of its 1968 models is scheduled to begin Sept. 22, and the 90,000 cars already in dealers' hands should last for three weeks after that.

The Johnson Administration has so far maintained a hands-off policy. As long as the strike is confined to just one automaker, said Gardner Ackley, chairman of the Council of Economic Advisers, it might "somewhat dampen" the nation's economic activity, but "its main effect will be to postpone production sales and incomes into later months."

Such assurances notwithstanding, many of the 7,000 firms that supply Ford with parts and material are sure to be hurt; a few started laying off workers within hours after the strike began. The biggest burden, of course, will fall on the principals themselves. The U.A.W., warned Walter Reuther, "will be tested as it has never been tested before." Proclaimed Henry Ford II, chairman of the shut-down auto company: "The strike will be costly. But the effects of an unsound settlement would be far more pervasive, longer lasting and, in the final analysis, even more costly."

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