Concessions by unions: trend or stopgap?
Bal Harbour, Fla.
The leaders of organized labor and top business executives were asking the same questions this week in the wake of the ''historic'' contract agreement between the United Automobile Workers (UAW) and Ford Motor Company:Skip to next paragraph
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* Do contract concessions by the International Brotherhood of Teamsters in the trucking industry and now by the UAW with Ford signal a reversal of years of wage increases?
* Will the trend toward a trade-off of wages and benefits for greater job security spread to other industries as unions and employers negotiate major contracts covering 3.5 million workers in 1982?
* Will the savings for Ford -- an estimated $3 billion over 30 months -- put the No. 2 carmaker back on the road to profitability and help restore the US auto industry?
* What impact will ''giveaways'' have within the unions, where dissidents already are challenging contract concessions to employers?
The questions come much more easily than answers. Labor-management relations are entering a new phase and nobody on either side is sure how things will work out.
There is, however, general acknowledgment that labor costs had reached a point where something had to done -- even at a risk of mistakes.
No unionists preparing for bargaining this year and next want to talk publicly about the future -- certainly not about a slowdown, or an actually downturn, in wage and benefits. No one will admit to plans for following the lead set by the Teamsters in trucking and UAW in the auto industry.
Lane Kirkland, president of AFL-CIO, puts it this way:
''I don't think you can logically take one event in a certain environment and project it in a universal way. Collective bargaining negotiations are conducted by unions and employers on the basis of the facts relative to their own concerns , and these are not all alike.''
The staff specialists for major unions who dig up the facts used in bargaining concede cautiously that the signs are not good for a tough negotiating stand by organized labor. Employers now have the advantage -- and most are using it to improve competitive positions at a cost to unions and their members.
Broad interest in the dramatic concessions by the Teamsters (a pay freeze, fewer cost-of-living adjustments, and an easing of costly work rules) and now those by UAW stems largely from the background of these unions. In the past, both have been militant at bargaining tables, and the costly contracts they have negotiated generally have set patterns.
Undoubtedly, employers will now demand -- and get -- concessions from other unions. But this movement had begun even before the Teamsters and UAW agreements. Among others, rubber and retail-store unions have given concessions to employers. The trend can be expected to continue, but only until the economy picks up, unemployment drops, and -- perhaps most important of all -- the flow of low-priced imported products is stemmed.
''This is a one-shot situation,'' one union official said at this week's meeting of the AFL-CIO executive council at Bal Harbour, Fla. ''When employers bounce back, and they will, we are going to be asking for new contract talks. If we give them something in bargaining on the down side, we'll expect them to do the same thing when business turns up.''
Most of those contacted at the AFL-CIO midwinter session agreed: If there are cutbacks in wage demands now, don't expect them to last.
UAW's concessions unquestionably will help Ford, which last year lost about $ 1 billion. But it is expected to take more than just union aid to turn Ford and the auto industry around. The recession is a major factor in continuing drops in auto sales, which in the first week of February were at the lowest level in 21 years.
According to Ford chairman Philip Caldwell, UAW concessions should be ''the catalyst for restoring . . . competitiveness.''
Ford vice-president Peter J. Pestillo says the agreement will guarantee labor peace while the company introduces a broad range of new models vital to the company's immediate future. ''This assures us of uninterrupted production for the next 30 months,'' Mr. Pestillo says. ''That's very important to us.''
The Ford-UAW deal does not contain provisions for a reduction in car prices, something UAW president Douglas Fraser would like. Lower prices would ''stimulate the total car, truck, and van sales in the United States and benefit the entire domestic auto industry,'' he says. ''Improved sales mean increased production and that would result in many of the more than 241,000 laid-off UAW members being recalled.''
UAW's deal with Ford will not help the one-third of Ford's unionized work force (55,000 workers) who already are laid off. Unless the agreement turns Ford around enough to lead to a significant amount of rehiring, UAW leadership may be hard put to stay in power in the next union election.
GM now is likely to run into tough bargaining when it resumes negotiations with UAW in July. The nation's No. 1 automaker could face a strike. By its failure to negotiate an early settlement, GM must now face a UAW that probably will have a tactical advantage.