Where the Strike Hurts

Anyone who hoped that the General Motors strike would end before the first snowfall had cause to ponder a union vote last week in the Detroit suburb of Warren, Mich. It is the site of G.M.'s technical center, where the company is developing antipollution systems and shock-resistant bumpers. The company asked Local 160 of the United Auto Workers to allow 306 strikers to return to work on these special projects. A top U.A.W. official urged the members to agree, especially since improved pollution control is one of the union's demands. To the surprise of the company --and the embarrassment of the union leadership--the members of Local 160 voted unanimously to reject the request.

The incident showed the animosity that surrounds the strike like a cloud of smog. The stoppage is now in its sixth week, and both sides agree that local issues must be settled before work can resume. As of last week only about 25% of some 39,000 local demands had been resolved, and they were the least difficult ones. An optimist in Detroit nowadays is someone who still expects the G.M. workers to return well before Christmas; the pessimists predict that the walkout will last until early next year.

Pay Cuts. The rapidly spreading effects of the strike will become worse as the walkout drags on. Government economists estimate that the loss to the gross national product is running at $1 billion a week, and that it will double if the stoppage continues through the fourth quarter. Largely because of the strike, steel production is down 11% from last year. Jones & Laughlin has cut its work force by 4,000 (out of 41,000), and other steel manufacturers have ordered layoffs. Last week, Wheeling-Pittsburgh Steel Corp., citing a "lagging economy and disruptive conditions," ordered a 10% pay cut for 2,000 management personnel.

Companies in many other industries are also hurting. Michigan's Kelsey-Hayes Co., which makes auto parts, has laid off 1,000 of its 5,000 workers. Uniroyal, the tire manufacturer, has let 1,900 employees go for the duration. The Grand Trunk Western Railroad has thinned out its work force by 600 men, and the Penn Central, with its largest single customer out of operation, has been affected "seriously" and cut back some of its operations. Several of the advertising agencies that handle G.M. accounts have decreed pay slashes. Chevrolet's agency, Campbell-Ewald, for instance, has imposed reductions ranging from 10% for everyone making less than $10,000 a year to 15% for staffers earning between $10,000 and $25,000, and 25% for those earning more.

Food Stamps. Retailers are finding business rough around Detroit, Flint and other G.M. centers in Michigan. J. L. Hudson's, the big department store chain, has reduced its staff by 10%. But hardware and lumber stores are doing well supplying the strikers, who now have plenty of time to finish a recreation room or repair a back porch. The strikers have difficulty locating part-time jobs. In Atlanta, several have taken temporary jobs distributing leaflets in shopping centers. One enterprising man sold a cartful of apples outside the local union hall.

In the Detroit area, more than 12,000 families of G.M. strikers are receiving federal food stamps. Another 600 families are collecting aid for dependent chil dren, and 400 more are on direct welfare. The strikers' use of taxpayer-supported welfare has become a local issue. Said the Detroit Free Press in an editorial: "The question is whether the right of one citizen to strike implies a duty on the part of other citizens to help him against his employer." On the other side was the question of whether workers' families should be made to go hungry in an industrial dispute.

Permanent Loss. To G.M. itself, the cost of the strike is particularly high. The investment banking firm of Goldman, Sachs estimates that the strike sliced 30-c--35-c- per share off G.M.'s third-quarter profits, and will take off another 15-c--20-c- for every week that it continues in the fourth quarter. (The company's profits last year were $5.95 per share.) G.M. dealers sold 30% fewer cars and trucks during the first ten days of October than in the same period of 1969. Most dealers have enough cars on hand to last at least until the end of this month. The company's main competitor is not profiting from the shutdown. Ford, which is holding off part of its advertising to match G.M.'s expected post-strike campaign, saw its sales drop 1% last month. Chrysler gained 17%, and American Motors about 2%. G.M. stands to make up two-thirds or more of its lost sales after the strike is over, but the remainder will represent a permanent loss to the economy.

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