Guidelines Face a Rough Ride

Their fate may hang on the Teamsters' wage talks

Amid all the alarm over multiplying profits and double-digit inflation, the White House is facing what could be a make-or-break challenge to its Stage II efforts to restrain union pay demands. The crunch will come in its attempt to hold the critical Teamsters contract settlement within the Administration's "voluntary" guideline limits of 7% a year in wage and benefit increases. On the 13th floor of a hotel overlooking Arlington National Cemetery, union and management negotiators have been bargaining in earnest for more than a week to shape a new master freight agreement for the Teamsters' 270,000 drivers and loaders. The two sides have until midnight this Saturday, March 31,when the present contract expires, to reach an agreement.

The Teamsters are used to hefty settlements, and won more than 10% annually in their last contract. If they can somehow be persuaded to stay even close to this year's 7% guideline, the other pace-setting unions that will negotiate contracts later in 1978--the electrical, rubber and auto workers--may moderate their demands. But should the Teamsters gravely breach the guides, 3.3 million other union members whose contracts expire this year will probably feel free to go for broke. As one of the Administration's inflation fighters put it: "If we lose master freight, we can forget about Stage II."

The union is demanding an increase of 75-c- an hour in the first year and 50-c- in each of the next two years. Members now earn about $9.40 an hour, and long-distance drivers can make $30,000 a year. The drivers are also asking for bigger employer contributions to benefit plans and larger cost-of-living boosts. In all, the demands would come to a three-year increase of 35% to 38%, well above the guidelines.

Management's offer, on the other hand, is much closer to the guidelines. The companies are offering a 65-c- hourly wage increase in the first year, or 6.5%, followed by a raise of 10-c- an hour in each of the next two years. But various improvements in benefits and cost-of-living escalators would bring the whole package to roughly 23% over three years.

Both sides will give and take as the negotiations proceed, but there is a limit to how much Teamsters President Frank Fitzsimmons can bend. If he stays firm and wins a big settlement, that may help him fight off small but growing and vocal dissident movements within his union. The insurgent groups--Washington-based PROD Inc. and the Teamsters for a Democratic Union in Detroit--aim to wrest control of the scandal-scarred union's leadership. The rebels want more democracy and a cleanup at the top.

Though the 10,000 or so dissidents will play no direct role in negotiations, their views accurately reflect those of many union members who have not joined them. The national leadership feels that a big settlement would help quiet members' broad complaints about unsafe working conditions, compulsory overtime and mismanagement of pension funds. If Fitzsimmons settles for too little, he risks handing the dissidents a major arguing point in future struggles.

Though neither side wants a strike, the union seems prepared to walk out if necessary. The Teamsters' bargaining council called for a strike authorization vote by its locals over the weekend, and approval by a large margin was expected. Since such a stoppage could bring the economy to a wrenching halt, the Carter Administration has made clear that it will move quickly to end any strike, probably by invoking the Taft-Hartley Act. That would require a 90-day cooling-off period, during which the truckers would be under court order to stay on the job.

With so much at stake, the White House has been using all its muscle to hold the agreement within the guidelines. Federal Mediator Wayne Horvitz, who helped arrange settlements in the postal and oil workers' negotiations, is sitting in on the bargaining and trying to nudge the two sides together. The Administration is implicitly threatening the industry against caving in to union demands. The Interstate Commerce Commission has informally told the companies that they will not be allowed to pass through--as higher rates--any raises of more than 7%. Until now, the ICC has merely rubber-stamped the requests of trucking firms.

Alfred Kahn, the President's senior inflation fighter, has warned that any agreement in excess of the guidelines would move the Administration to intensify its efforts to deregulate the trucking industry. That would make it easier for new firms to pick up lucrative routes. The trucking companies and drivers fear deregulation because competition may reduce rates, profits and job security. So far, key congressional committees have been cool to deregulation. There are major trucking firms in almost every congressional district, and they can bring much pressure on their legislators.

Thus the Teamsters' leadership is caught on a narrow, twisting road. If it accepts too little, it weakens its hold on the rank and file. If it pushes for too much, it risks the wrath of the White House and possible deregulation. Finding a compromise that will satisfy all sides is likely to be as difficult as gunning a ten-ton truck through the eye of a needle.

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