Labor's Hard Day's Night

By Christopher Redman

Autoworkers and miners win more job security in their new contracts

It is an excellent settlement that makes more secure than ever in history the jobs of our members, while providing much deserved economic improvements immediately and in the years ahead." That bold claim by Owen Bieber, president of the United Auto Workers, at 2:20 last Friday morning, brought to an end three months of intense negotiations between General Motors and its workers. The agreement on a new three-year contract raised hopes that the auto industry, which is now enjoying a boom, will be spared a long and damaging strike.

Barely two hours later, Richard Trumka, president of the United Mine Workers, emerged from a suite at the Sheraton Carlton Hotel in Washington, D.C., to announce tentative agreement on a new 40-month contract with the Bituminous Coal Operators' Association. Trumka called the deal "a giant step forward in this industry." If miners approve the contract, it will be the first time since 1964 that the U.M.W. has reached a new wage agreement without a strike.

Both the Autoworkers and the Mineworkers have a reputation for tough bargaining and long, bitter strikes. Each union takes pride in its history and its legendary past leaders, who were willing to stand up even to Presidents of the U.S. to get a good deal for their workers. But the mood in the negotiations this year was different. This time there was more talk about job security than higher wages. Autoworkers, whose numbers have declined from 1.5 million to 1.2 million in the past six years as their industry was battered by fuel shortages, recession and Japanese competition, were eager to protect the remaining jobs. Miners have seen their ranks thin from a heyday in 1942 of 595,000 to a current membership of 160,000, and they too wanted to keep on working. In the end, the agreements the two unions reached last week reflected a spirit of cooperation rather than confrontation.

While final details of the two union contracts will not be announced until this week, neither apparently involved large wage hikes that could unsettle the recovery. The agreements came at a time when new statistics indicated that the economy was beginning to slow down from the torrid pace of the first half of the year, as most experts have been predicting. The Commerce Department reported last week that according to its preliminary estimates, the gross national product in the third quarter grew at an annual rate of 3.6%, down from 7.1% in the second quarter. In addition, housing starts in August plunged 12.8% to an annual rate of 1.53 million units, the lowest level since December 1982. Many experts agreed with the judgment of Commerce Secretary Malcolm Baldrige, who told a Washington press conference, "The economy has shifted down to a more moderate and sustainable growth rate." Somewhat more disturbing was the latest figure on inflation. Consumer prices in August rose .5%, or an annual rate of about 6%, the biggest increase since last spring. This could be the first sign that slightly higher inflation is on the way.

When the U.A.W and General Motors failed to reach agreement on a new contract by midnight of Sept. 14, the union called its workers out on a selective strike against key GM facilities. The union was trying to have the greatest impact on GM production with the smallest amount of work lost for its members. The selective strike, allegedly authorized by the U.A.W. because of pressing local grievances, originally affected only 13 facilities, employing 62,700 workers. By no coincidence those plants turn out nearly half of GM's total production, including such hot-selling models as the Pontiac Fiero and Buick Century. But as the selective strike continued last week, more and more workers began to feel the impact of the partial walkout. At its peak, the strike affected 40 plants and 110,000 workers, one-third of GM's blue-collar work force.

Entering into the talks with GM, U.A.W. leaders were determined above all to secure guarantees against further job loss. They were supported in that goal by young union members who did not want to join the thousands who have already left the industry. "I want to have a job eight, ten, 15 years from now," said Larry Sandridge, 29, a polisher at Cadillac's Clark Avenue plant in Detroit for the past eight years. "I'm on the bottom of the totem pole. If we don't get job security now, I'm going to be pushed off." Concurs fellow Assembly Line Worker Jack Stewart, 30: "If you don't have that job, a wage increase isn't going to do you any good."

After the talks ended, Bieber claimed to have negotiated "an unprecedented job-security program with far-reaching new protection for our members against job loss." He said it would safeguard them against job loss due to plant closings, new technology and "outsourcing"--the industry's code name for producing cars and parts abroad. He also said he had won commitments from GM to "maintain production and create new job opportunities" in the U.S. The program offered by GM reportedly consists of a $1 billion "job security pool" from which workers with as little as one year's seniority can draw pay in the event their jobs are eliminated. The new contract does not contain any outright constraints on GM's ability to import parts and even entire cars from abroad.

The proposed contract provides for a pay increase of 2.25% in the first year and lump-sum payments in the second and third equivalent to 2.25%. The lump-sum payments, however, will not be folded into the workers' current average basic wage of $9.63 an hour on which cost of living pay adjustments are calculated, and thus will not be built upon in future pay hikes. Under the agreement, workers will be eligible for "attendance bonuses" of up to $500 a year and a one-time ratification payment of $180. A unique feature of the contract is a venture-capital fund worth $100 million. GM is putting up the money to help displaced workers launch their own businesses.

Those pay provisions seem to represent a victory for GM. Said Alfred Nelson, an industry analyst with Wall Street investment firm Becker-Paribas: "GM has clearly got the better part of the bargain. The settlement is yet another indication of the shift of power from labor to management."

GM had sought all along to minimize wage increases in order to keep manufacturing costs down. Said Alfred Warren Jr., GM's chief labor negotiator, after the conclusion of the talks: "It was absolutely essential that we come out of these negotiations totally competitive, that we come out in a better competitive position than we went in. As we look forward, we think that the contract will help."

Both GM and the union were outwardly optimistic last week that the contract will be approved by workers. Said Warren: "We are confident that this agreement, reached after tough but professional negotiations, will be ratified quickly." Concurred Bieber: "I'm confident that once the leadership and rank and file have a chance to look at it, they will accept it."

Nonetheless, there is a clear and present danger that the contract might be rejected by GM's 350,000 union members. The first step in ratification will take place Wednesday, when the agreement is put before a special meeting of the 300-member unit council of local union leaders in St. Louis. If they approve, the accord will then go to the rank and file for their assent. Voting could take up to ten days.

Union officials concede privately that they expect a tough ratification fight. Many senior union members, who are relatively safe from layoffs, are likely to vote against the agreement because it did not get them fatter paychecks. Warned David Lankford, 37, a sweeper with 18 years seniority at the Clark Avenue Cadillac plant: "I want a raise. I'd vote down anything less than getting back our 3% a year." Rallying under the slogan "restore and more in '84," workers like Lankford have maintained that the union should not only recoup concessions made in its 1982 contract with GM at the depth of the auto industry's troubles but also win additional benefits. That year, U.A.W. leaders predicted the contract with GM would pass comfortably, only to see it scrape by, 52% to 48%.

The United Mine Workers have an even stronger tradition than the Auto-workers of rejecting contracts negotiated by their leaders and hitting the picket line. Five times in the past two decades, workers have gone on strike. In 1977-78 the miners were out for 111 days, and in 1981 the walkout lasted 72 days. But U.M.W. President Trumka this year was determined to break precedent. The coal miner turned lawyer wanted to win better salaries and better job security--without recourse to a strike. When the talks in Washington ended, he claimed to have secured a "totally non-concessionary" agreement. "It makes no giveback, no takeaways," said the U.M.W president. "It makes gains in wages. It makes gains in job security. It makes gains in the area of safety. It makes gains in the area of pensions."

In fact the terms were relatively modest. Wages will increase 10.25% over the 40 months of the contract. The top hourly pay will go from $14.16 to $15.56. Pensions, sickness and accident benefits will also be increased slightly. The job security provisions include measures to protect miners' seniority and rights at mines leased to new operators, rules to benefit U.M.W. workers laid off as a result of subleasing and a requirement that mineowners notify the union when they plan to sell an operation and furnish proof that the buyer will abide by the union contract. In the past, new owners frequently broke existing wage contracts.

The fact that two of the most powerful and combative unions have managed to achieve at the bargaining table what they have formerly sought to get by the picket line may be an important precedent for the U.S. labor movement. Says Scott Merlis, a securities analyst for Shearson/ American Express: "The Autoworkers' agreement is a watershed in the sense that we are moving from the British model of confrontation to the Japanese model of cooperation between labor and management." But it still remains to be seen if the rank and file will conform to that new model.

--By Christopher Redman. Reported by Gisela Bolte/Washington and Paul A. Witteman/Detroit

With reporting by Gisela Bolte/Washington, Paul A. Witteman/Detroit