And now GM
This was a case where the largest US automaker - General Motors - posted a clear ''second-place'' finish after reaching tentative agreement on a new jobs and wages pact with the United Automobile Workers union. Ford, after all, had concluded a similar contract last month. The GM agreement, however, assuming that it is ratified by the firm's huge rank-and-file work force, certainly underscores the impact on American industry of tough overseas competition, slumping sales, and recession. So, together with the Ford agreement, it represents a genuine turning point for both US industry and organized labor. It will not go unnoticed by other US manufacturing industries.Skip to next paragraph
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As in the case of the Ford agreement, the key to the GM pact is a tradeoff: increased job security in exchange for a freeze on wages for the life of the contract (through September 1984); elimination of nine paid holidays; and a temporary giving up of cost-of-living increases. Such terms represent a remarkable shift from just a few years back, when the well-organized auto workers not only sought annual cost-of-living hikes but had continuous pay increases built into their contracts.
As we have noted before, the movement away from confrontation and toward cooperation within the troubled auto industry is overdue and should help the longer-range rejuvenation needed by Detroit. The GM pact does have some worrisome elements, such as keeping open plants that management only recently said should be closed and consolidated as part of a logical retrenchment process , and imposing sharp restrictions on ''outsourcing'' -- i.e., going to non-GM contractors both in the US and abroad for some supplies or work. The result of the latter cutback will merely be to shift unemployment elsewhere in the economy.
In all though, GM and the auto workers have concluded a responsible and historic agreement. The task now will be to translate those mutual concessions into greater productivity -- and car products that are affordable and of proven quality.