Auto Workers Hear the Drums Again

STANDING in the rain to collect their strike pay--$30 a week for a single man, $40 for a family--the strikers in their baggy cotton pants and frayed shirts evoked an image of the 1930s. The line stretched around the grimy headquarters of United Auto Workers Local 235 in Hamtramck, Mich. Occasionally, one of the men raised a clenched fist in salute, or another flashed a smile for photographers or a V-for-victory gesture, but mostly they were strangely silent. Across the street, pickets patrolled Chevrolet's gear and axle plant, carrying signs that proclaimed: UAW ON STRIKE FOR JUSTICE, or INCREASED PENSIONS or, simply, EQUITY. Said one of the pickets, Robert Jackson: "They told us the strike would last till next year. We're going to see Christmas on these picket lines, but we're fighting for a purpose."

In that atmosphere, a strike that could turn out to be the most significant one since the 116-day walkout of the steelworkers in 1959 began last week in Detroit. The nation's largest industrial union, the 1,600,000-member United Auto Workers, invoked labor's ultimate weapon against General Motors, the world's largest manufacturer. In a classic test of raw power, the strike pulled 344,000 workers off their jobs in 145 U.S. and Canadian plants. Every day that it lasts, G.M. says, the company will lose $90 million in sales, the men will be deprived of $12 million in wages, and federal, state and local governments will be denied $20 million in taxes.

Crusades in Conflict. For both sides, the costly contest was almost a jihad, or holy war. To Leonard Woodcock, the quiet, scholarly leader who took over as president of the U.A.W. last May after Walter Reuther died in an airplane crash, the strike was a call to arms for a younger generation of workers who know nothing of the union battles of the '30s. In meeting after meeting, he has told the men to dig in for a long, bitter siege, warning that they will have to go without strike pay after the union's $120 million war chest runs out in about seven weeks' time. "We have to be prepared to fight, as we used to do, in an old-fashioned way," he told workers. "A union with money is a bureaucracy. A union without money is a crusade."

G.M.'s management is holding out in what it sees as a higher cause: halting runaway wage increases. Chairman James Roche declared: "We must restore the balance that has been lost between wages and productivity, for upon this balance rests our national ability to cope with inflation, to resolve the crisis of cost. This in turn determines our capacity to achieve the lofty national goals we have set for ourselves."

In management's view, the strike will decide whether the U.S. auto industry is destined to join the long list of others --textiles, radios, shoes, barber chairs --that can no longer freely and vigorously compete against lower wage foreign manufacturers. In July, imported cars captured an alltime high 15.6% of the nation's auto market. Last week Chevrolet Chief John Z. DeLorean observed that U.S. wage rates are 2.1 times as high as Germany's, 2.8 times Britain's and four times Japan's. Though wages abroad are leaping ahead faster in percentage terms than those in the U.S., American wages are so much higher to begin with that the dollars-and-cents gap has actually widened.

How Long? The current collision between auto labor and management in Detroit hurts much of the rest of the U.S. and Canada. G.M. uses 10% of the U.S.'s steel, 5% of its aluminum and large portions of its glass, rubber and textiles. Last week in Lexington, Ky., Irvin Industries laid off 375 workers who make seat belts. In Stratford, Ont., the auto strike put 100 workers out of their jobs at Standard Products, which manufactures rubber parts. The beleaguered Penn Central railroad began laying off workers who normally handle shipments of G.M. cars and trucks. In a month, a million more men could be out of work across the U.S.

Moreover, the strike is likely to trim down any third-quarter economic upturn (see box, page 72). One consequence is that the industrial-production index, which declined in August for the first time in five months, will fall further. If the strike lasts more than six weeks, it will depress many businesses indirectly connected with the auto industry. In that case, lower corporate profits and more unemployment will sink the federal budget deeper in the red, increasing the prospects for a tax increase. The Nixon Administration expects that the strike will be over in six to eight weeks, but the consensus in Detroit is that it quite possibly could stretch out to twelve or 15 weeks, or even more. (G.M. dealers' supply of cars will last for six to seven weeks, including 1970 models.) Even after the auto strike is settled, the economy will be further distorted as General Motors and its suppliers work overtime to make up for lost production.

The walkout is one more sign that union members everywhere are marching to a martial drum. This year the pace of American life has been snarled by an unusual number of strikes, and the appetites of union members have been whetted by some outrageously high settlements. Construction workers in this year's first quarter squeezed out wage increases averaging 18%. Last June, the Teamsters won hourly raises of $1.85 over 39 months.

Now the railroad workers demand a 40% wage increase. Last week 45,000 workers halted trains for about twelve hours on Southern Pacific, Chesapeake & Ohio and Baltimore & Ohio railroads. The men returned to work under a court injunction, and late in the week President Nixon signed an executive order delaying any national rail strike for 60 days.

Younger and Impatient. The auto workers' union has become noticeably more militant this year, largely because its membership is becoming younger--and impatient. Over the past decade, the median age of men in the auto plants has declined from 41 to 37; more than one-third of the strikers are under 25. The youngsters insist on big gains--now. A common refrain among union leaders is voiced by Leonard Paula, who represents 4,700 white-collar workers in U.A.W. Local 112 at Chrysler: "I try to tell the young guys that they have to wait for some things, but they come up with their beards and mop heads and say, 'Hey, mother, you're ancient.' They do not even listen."

The 26-c- Battle. Because of inflation, many workers cannot make ends meet. The average hourly pay of G.M. workers is $4.05, but by Leonard Woodcock's reckoning, they have a great deal of catching up to do. As a result of reductions in overtime work, the auto worker earns 1.7% less than he did a year ago; in addition, inflation has taken a 7.4% cut out of the purchasing power of what he earns. Just to get back to where he was in the spring of 1969, by the U.A.W.'s calculation, the auto worker would have to have a raise of at least 8% an hour. The union asks for a 61.5-c- increase in the first year of a new contract and further raises in the second and third years; the amounts will depend on whatever cost-of-living settlement is agreed on. G.M. is offering 38-c- in the first year, and second-and third-year increases of 12-c- each. The company says that that would give the typical assembly-line worker an annual income, including the value of fringe benefits, of more than $12,000 by the fall of 1973.

The two sides are farther apart than the figures indicate, because of a highly ambiguous clause in an agreement that Reuther negotiated to end the 66-day strike against Ford in 1967. The resulting conflict is an object lesson of the perils of postponing trouble. In the 1967 contract, the union accepted a ceiling on cost-of-living increases in return for an agreement that compensation for inflation above that ceiling "shall be available" in 1970. The difference now amounts to 26-c- an hour, which the union considers to be money already owed its members above and beyond any new settlement; the company includes the 26-c- as part of its 38-c- offer. In the "next contract, the union is insisting that there be no ceiling on cost-of-living increases.

For many of the pickets, a more crucial issue is the union's demand for "30 and out"--voluntary retirement at any age after 30 years of service on a minimum pension of $500 a month. G.M. has 41,000 employees with 25 years or more of service, and, says the company's chief negotiator, Vice President Earl Bramblett, "the possibility of losing such a large number of highly skilled and experienced personnel could be a crippling blow." The company offers instead what might be called "58 and out"--retirement on a $500-a-month pension at 58, with $40 a month deducted for every year a worker is below that age when he leaves.

How can the impasse be settled? One way might be for G.M. to offer a more liberal cost-of-living allowance in return for a lower wage settlement, figuring that inflation will slow during the next two years. Woodcock has hinted at the possibility of such a deal. In a remarkable statement, he expressed his preference for cost-of-living escalators in place of huge wage increases in the later years of a contract. "I believe that if you bargain wages to anticipate an inflation, then you are guaranteeing that inflation," he said. "I am concerned about constantly escalating future wage increases further distorting the economy and possibly leading to a major recession, if not worse."

Prices and Politics. The eventual settlement of the U.A.W. strike will be a bench mark. A settlement in line with G.M.'s offer would provide other companies with an example of successful resistance, discouraging future strikes. On the other hand, a large wage gain would give other unions a new goal to shoot at, and would doubtless be followed by another increase in the price of cars and trucks. Last week Ford, which is still producing cars, as are Chrysler and American Motors, raised prices on its 1971 autos by 4.8%, the biggest increase in 14 years. Ford executives hinted that there might be even higher raises after a new labor contract is signed. Yet the auto industry cannot pass all of its increasing labor costs on to consumers. Detroit is dreadfully frightened that Americans will continue to shift to lower-priced imported autos. U.S. car sales are down this year partly because the U.S. public, hurt by both inflation and unemployment, is hesitant to invest in big-ticket purchases. To fight the price rise, Detroit is automating to the extent of using robot welders on G.M.'s Vega 2300 assembly line. Still, prices continue to climb.

The Administration is resigned to the likelihood that almost any settlement that will bring the men back to work is bound to be inflationary. Government economists have privately voiced hopes that the wage deal would be in the range of 8% to 10%. G.M.'s final offer before the workers went out amounted to 9.8%. At least for now, the Administration has no plans to use its power to try to force a settlement. But if the strike drags on until snow falls, the pickets will be faced with the prospect of doing without strike pay, and part of their anger is bound to be directed at the Government. The public will blame the Administration if widespread layoffs brought about by a long stoppage send unemployment over 6%. Unless there is an unexpected break in the strike before the November elections. Republican votes will be hard to come by in areas where the U.A.W.'s picket lines have disrupted the local economy.

In a free economy, conflicts between powerful competing forces are inevitable. U.S. labor has won many of its greatest advances only after striking. Yet the auto walkout comes at a particularly bad time, when the nation is troubled and its economy is sluggish. If the pessimists are proved correct and the strike drags on, it may well become a cause celebre for organized labor, drawing to the workers' side protest movements of all sorts. The real tragedy of the bitter battle is that it hits the U.S. when the country can ill afford any further social tension.

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