Decision in Detroit

Decision in Detroit President Walter Reuther of the C.I.O. United Automobile Workers won last week what he called--with good reason--a "very historic" victory. For the first time, a large unit of U.S. heavy industry, Ford Motor Co.. accepted at the bargaining table direct responsibility for the partial support of its workmen during layoffs. It was a long stride toward Reuther's goal, the guaranteed annual wage, which would give industrial labor job security and status like that enjoyed by salaried employees.

Labor waited a long time for this step. Quietly, over the decades, more and more U.S. workers have shifted from an hourly wage to an annual salary basis, but the change was established as a contract right for relatively few workers. Before the U.A.W. was born in 1936, seasonal layoffs were recognized as an especially sore spot in the labor situation of the auto industry. The C.I.O.'s late President Phil Murray got nowhere in 1944 when he bid for the guaranteed annual wage. But Reuther (who succeeded Murray as C.I.O. president) and his tough, 1,523,000-man United Auto Workers made the most determined attempt in the history of U.S. labor.

Three-Year Preparation. In 1950, the year he won his last great gains in five-year contracts with the auto industry's Big Three (General Motors, Ford and Chrysler), Reuther was already working to win the guaranteed annual wage in the new contract this year. His economists and researchers worked over the figures for three years before agreeing that the guaranteed annual wage (G.A.W.) was practical: "Industry can afford it." His busy educational division churned out pamphlets, posters and propaganda. Auto workers were warned repeatedly that growing automation would cause increasing layoffs unless the workers were protected by G.A.W.; the nation at large was told that G.A.W. could prevent another depression. "Unemployment," cried Reuther, "breeds more unemployment." When negotiations began this spring, Reuther was ready, and Ford workers voted 96.2% to strike if need be.

Over the years, Reuther has struck all three of the Big Three, but never simultaneously. His slogan: "One at a time." This year's first objective: Ford. Reuther reasoned that Ford, running neck and neck with Chevrolet, eager to expand and preparing to make its stock available to the public this fall, would be likeliest to come to terms. Besides, strike benefits for Ford's 140,000 workers would cost less than for G.M.'s 325,000. The G.M. union contract was expiring May 29, but Reuther extended it until June 7, so that the Ford contract would expire first, on June i. That became the strike deadline.

A Semi-Annual Wage. In the Ford negotiations at the red-and-beige Silver Room of the Detroit-Leland Hotel, both sides talked--behind a pledge of secrecy --until almost a week before deadline. Then Reuther warned that G.M. had made an offer. Two days later, Ford's Vice President John Bugas presented a "partnership in prosperity" plan.

Ford Motor Co., too, had been doing some bold thinking; its offer reflected the awareness of many industry leaders that their workers want and can have more security. Ford offered to sell workers company stock on favorable terms, to give severance pay, and to advance to workers interest-free layoff loans, payable out of later wages. When Reuther turned this down flatly, Henry Ford II protested that Ford workers should have had a chance to vote on the offer. Reuther shrewdly offered to put both the Ford plan and G.A.W. on the ballot for decision by the workers' vote.

Last week, just before the strike deadline, Ford made a new offer and Reuther extended the strike deadline until Sunday midnight. In Detroit and throughout the 63 nationwide Ford plants and depots, production of 11,283 cars and trucks was lost because of wildcat walkouts, some spontaneous, some engineered by the union as a means of stepping up pressure. Soup kitchens were ostentatiously set up and picket signs painted. Some 30,000 Ford workers poured out of the 1,200-acre Rouge plant, the world's largest, for a mass meeting at the spot where, 18 years ago, Reuther and other organizers were beaten up by plant guards at the famed "Battle of the Overpass." When the strike extension was announced, the younger men protested, roaring: "Let's go fishing!" Actually, by then Reuther and the union had won G.A.W.--at least in principle.

At week's end, Reuther disclosed the Ford offer. The company would set up special funds up to a total of $55 million. Out of these, laid-off Ford workers would be paid enough, along with state unemployment compensation, to give them up to 65% of normal take-home pay for four weeks and then 60% for another 22 weeks, a total of 26 weeks' partial layoff pay: in short, a guaranteed semi-annual wage.

The plan's cost to Ford for every man on the payroll: $100 the first year, rising to $120 the second year and $140 the third, or some 2% of the annual wage bill. Sample benefits from the fund: a Ford worker in Detroit with two dependents and $87 weekly take-home pay would get, besides his $42 weekly state unemployment compensation, $14.56 weekly from the Ford fund for four weeks (a weekly total of $56.56) and then $10.21 weekly for another 22 weeks (weekly total $52.21). "You and we," Ford's Vice President Bugas told Reuther's negotiators, "are either going to be widely acclaimed or widely blamed for the bold new step--probably froth."

Main difference between the union's original plan and the Ford plan: the level of payments and the company's total liability (Reuther had called for a $130 million benefit fund). Bugas told reporters: "We are not interested in paying layoff wages; we are interested in keeping people at work." Reuther was delighted; bouncy and bright-eyed, he told newsmen of the "very historic yielding of the basic position of management."

In a letter to Henry Ford II, Reuther accepted both the $55 million figure and the general framework of the Ford plan. But he contended that the funds offered by Ford would support a higher rate of layoff pay for a longer period (80% of take-home pay for 52 weeks); he suggested arbitration of "the level and duration" of the fund's benefit payments, while negotiations concluded on the rest of the contract. The company suggested further negotiations instead of arbitration.

The strike deadline passed. Hopes rested on a statement by Reuther: "It would be tragic and an unconscionable sin to permit a strike to take place in circumstances in which there is essential agreement upon the objective." The negotiators drew closer together on details and the threat of a major strike faded; the guaranteed wage loomed large, instead, upon the U.S. economic horizon.

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