Sealing a No-Strike Settlement

The price was high, but peace was preserved in autodom

"Excellent!" beamed Douglas Fraser, the United Auto Workers chief. "A credit to to both parties," said a General Motors negotiator. Both were praising a rare peaceful settlement, arrived at in a final flurry of horse trading at GM's imposing stone headquarters in Detroit just 4 1/2 hours before a strike deadline. For the first time in 15 years, the autoworkers had reached a tentative contract agreement without going on a national strike. The three-year pact was concluded with GM but sets the pattern for the industry and covers 780,000 workers.

Some details, including the precise size of the wage increase, were withheld until the settlement could be reviewed by officers of the GM locals, meeting in Detroit this week. A local-by-local ratification vote by all members should be completed within ten days.

With auto sales sagging and 85,900 workers already laid off, the union was in no mood for a walkout. GM, benefiting from the successful introduction of its small, front-wheel-drive cars, .was also eager to avoid a shutdown.

Both sides compromised on the major issue of increasing pensions to keep up with inflation. At first the union wanted pension payments tied to rises in the cost of living: the company strongly rejected that because of the potential high cost. In the end, the union accepted the company's counteroffer to make periodic increases to help protect pensioners against rising prices. During the next three years, workers under 62 who retire after 30 years on the job will get $800 a month to start. Then they will get two in creases in the first year and further boosts in the second and third year. At the end of the contract these retired workers could be receiving as much as $935, or 33.5% more than the present pension level. Pensioners already retired would also get raises, depending on age, length of service and when they left work. A retiree now receiving $700 a month will receive $865 by the end of the contract.

Another important union demand was that the company increase the number of paid personal holidays so that more workers would be kept on the job. The company agreed to increase paid days off (not counting vacation) from 12 to 26 during the life of the contract. Pending ratification, neither side would discuss the noneconomic improvements or the size of the increases in the cost-of-living clause and pay rates. One unofficial estimate put the wage increase at between 9% and 12%. At present the combined basic wage rate for all classes of GM workers is $9 an hour; by the end of the contract period that could well have risen to $11.50.

The settlement comes at a time when the Administration is working to revise and make more flexible its voluntary wage-price guidelines. They currently limit wage and benefit increases to 7% a year, which is well below the auto settlement. Indeed, there is talk that the wages and benefits achieved in Detroit could become the standard for the new guidelines. If that means approving settlements of close to 12% annually over the next year, the Administration's chances of effectively combatting inflation are dim.

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