Peace Is Profitable

The nation's largest, most profitable manufacturer and one of the nation's biggest unions last week made a bold, five-year pledge to continuing prosperity. They agreed to a contract guaranteeing 1) production without strikes for the five years of the contract, 2) an automatic wage increase every year, 3) one of the most generous pension plans in industry.

"Unprecedented," said General Motors' jubilant President Charles E. Wilson. It was, agreed the auto workers' President Walter Reuther, "the most significant development in labor relations since the mass-production industries were organized." After eight weeks of negotiation, both sides had come to terms and sprang their surprise in a joint press conference.

Coffee & Doughnuts. The new contract, which promised uninterrupted production at G.M. until 1955 at least, had been worked out amicably in the heat of the Chrysler strike.

There had been no table pounding, no angry words. Every day the company brought in coffee & doughnuts during the afternoon break. A union negotiator enlivened the tedious hours of debate by dumping half a dozen goldfish into the water cooler. Within the first weeks, the negotiators had come to terms on most fringe issues.

In this area, accident and sickness benefits will be increased (to a maximum of $45.50 a week), the union and company will split the cost of medical and hospitalization insurance. G.M. agreed to a modified union shop: G.M. workers now in the union must stay there for the duration of the contract; new employees would have to join for at least one year.

Not until it came to the pesky issue of pensions did negotiations begin to hot up. But G.M.'s Wilson had shrewdly prepared for that moment. G.M.'s negotiators tossed in a sugar plum: the offer of an automatic increase of 4-c- an hour each year for the next five years. The cost-of-living clause (which now gives U.A.W. workers an extra 3-c- an hour) will be continued, but will not drop below the new basic wage.

Billion-Dollar Raise. Thus hedged against both inflation and deflation, the auto workers promptly accepted, and crawled down from their $125-a-month pension demands. Instead, they agreed to the now standard $100-a-month pension, including social security. But a flip was added: if Congress raises social security payments, the union will get the benefit (to a maximum of $117.50 a month).

That settled it. With the last details ironed out, delegates representing 270,000 auto workers approved the contract. Next day, 35,000 G.M. electrical workers also came into the tent.

The union estimated its gains at $1 billion--worth $700 a year to every G.M. employee in the final year of the contract. G.M. refused to put any price tag on its concessions. But it was putting its faith on a continuing prosperity and increased production, which would more than pay the price of labor peace.

-Auto Workers' Reuther and Art Johnstone shaking hands with G.M.'s Vice President Harry Anderson and Labor Director Louis Seaton.

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