Zeroing In

When the 1961 auto negotiations began two months ago, hardly anyone expected that the United Auto Workers would resort to a strike--partly because the high U.S. unemployment rate had weakened the union's bargaining position. But last week a strike in the auto industry, though not yet inevitable, was an increasing possibility. Backed by an overwhelming strike vote, Walter Reuther had already chosen his prospective target: General Motors.

Reuther's position had undeniably been strengthened by the nation's improved economic condition. But the chief reason for his aggressiveness was his success fortnight ago in isolating American Motors and concluding with it a new three-year contract that included profit sharing (TIME. Sept. 1). Last week, as he settled down for intensive bargaining with G.M. Chief Negotiator Louis Seaton, Reuther demanded that G.M. match the American Motors agreement.

Overpriced. Along with Ford and Chrysler, G.M. refused even to consider profit sharing. The Big Three argue that once the union gets a direct share in profits, it will want a hand in running the company to help determine how large profits shall be. The companies also feel that one big advantage of profit sharing--creating an incentive for employees to work harder--is not to be had in the auto industry, where workers are bound by stringent, union-enforced work rules.

In lieu of profit sharing, Reuther was willing to settle for the equivalent amount of money in such benefits as increased hospitalization, pensions and unemployment pay. But G.M. maintained that the terms he demanded were too high; some Big Three statisticians reckoned that Reuther's demands would cost the companies as much as 15^ to 20^ an hour for every U.A.W. worker. Said one Big Three executive at week's end: "If Walter doesn't back down, there's going to be a strike.'7

Undisturbed. This threat did not seem to disturb Reuther unduly. The U.A.W. strike fund stands at $42 million--enough to pay strike benefits to G.M.'s 310,000 workers for almost two months. According to automen. Reuther was also counting on Government intervention in the event of a long strike; already the automen charged the Government had. in effect, intervened in Reuther's favor by negotiating a six-day extension of the Aug. 31 contract deadline --a move which will enable U.A.W. workers to collect $10.9 million in holiday pay for Labor Day.

If a showdown came. Reuther's decision to strike the biggest of the auto companies was a well-calculated gamble. Financially. G.M. could hold out longer than any other company, but is unlikely to relish the prospect of seeing its own plants shut down while Ford and Chrysler go on producing. And once G.M. signs with the U.A.W.. whether after a strike or only under threat of one. Ford and Chrysler presumably would have little choice but to accept the same terms.

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