Historic auto pact puts focus on quality

By , Senior economics correspondent of The Christian Science Monitor

''Eighty-five percent of Americans who buy Japanese cars,'' says Peter J. Pestillo, ''cite quality, not price.''

Until recently, says Donald Ephlin, ''absenteeism (in US car factories) was high, turnover was high, and quality was terrible.''

Messrs. Pestillo and Ephlin should know. The latter is the top union man at Ford, Pestillo is Ford vice-president for labor relations.

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The two men led the negotiations -- Ephlin for the United Autombile Workers (UAW), Pestillo for Ford -- that led to a historic agreement that could alter future relations between the managers and workers who build American cars.

Calling each other ''Don'' and ''Pete,'' they appeared at an unusual joint breakfast with reporters in Washington, just before UAW leaders urged 200 Ford locals to ratify the accord.

''To the extent we fail to satisfy people (with the quality of American cars) ,'' says Pestillo, ''price is no consideration.''

Improving quality, both men agree, holds the key to survivability of the giant US auto industry, at least in the form to which Americans are accustomed.

''GM and Ford,'' says Ephlin, ''may survive as worldwide corporations, but the domestic auto industry is in serious trouble.''

Even at best, jobs on US car assembly lines will dwindle. Acknowledging this, Ford and UAW officials agreed on mutual concessions -- lower labor costs for the company, better job security for union members.

Aim of the package is to save American jobs and to reduce the disparity in labor costs between Japanese and US auto workers -- $12 an hour for the former,

Mutual concessions, however, will be of little use unless the end result turns out to be higher-quality cars that Americans can be persuaded to buy. ''The Japanese,'' says Pestillo, defining the problem, ''now have a share of the US car market that is bigger than that of Ford and Chrysler combined.''

Over the long run, analysts agree, the most significant feature of the new accord may be a burying, or at least lessening, of the historic adversary relationship between labor and management and the forging of closer cooperation between the two. Pestillo and Ephlin admit to having learned from the Japanese in this regard.

What is emerging, says Ephlin, is an ''American version of industrial democracy,'' based on mutual respect and close consultations, from the shop floor to the board room.

If this sounds like the 1950s and 1960s in West Germany, Sweden, and other democracies where new concepts of labor-management cooperation were forged, it is -- or at least promises to be.

Inherent in the process, says UAW vice-president Ephlin, is an ''upgrading of the concept of blue collar workers'' and what they contribute to the making of cars.

''Quality slipped in part,'' he says, ''because managers accepted sloppy standards. This discouraged and degraded workers.''

Unlike UAW chief Douglas A. Fraser, who accepted a seat on Chrysler's board of directors, Mr. Ephlin did not press for an equivalent place with Ford.

''We were asking workers to make sacrifices,'' he said. ''We did not want to create the impression that we were trading benefits for a place on the board.'' He will, however, have access to the board, as well as to top companyofficials.

Key elements in the agreement:

* ''Outsourcing'' -- that is, manufacturing and buying parts abroad, where labor is cheaper -- will be sharply cut back. At two domestic Ford plants, where the agreement will get its broadest test, the work force will be reduced only through attrition.

* Ford offers a ''guaranteed income stream'' to high seniority workers. Those laid off with 15 years or more on the job will get 50 percent or more of their hourly wage rate, until they are 62 years old or retire.

* In return for these and other job security provisions, UAW officials gave up any increase in basic pay until September 1984, postponement of cost-of-living adjustments, and nine paid personal holidays.

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