GM pact moves industry along road to cooperation
The country's two major auto -companies now have negotiated cost- saving contracts with the United Auto Workers (UAW). Resulting savings to the companies may be as high as $4 billion annually.Skip to next paragraph
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General Motors' tentative agreement with the UAW -- the product of 37 hours of continuous bargaining -- trades substantial wage and other concessions by workers for more job and income security and an employee profit-sharing plan. It's similar to an earlier pact between the union and Ford.
Highlights of the GM pact include:
* An agreement by the firm not to close four of seven plants that it planned to shut down. The firm also agreed not to close any plants in the next two years as a result of decisions to buy auto and truck parts overseas for use on US assembly lines.
* The company will try out ''lifetime'' job guarantees in four plants and it will guarantee continued income for veteran employees who might be laid off. It will also give UAW a step toward a long-term objective, a share for workers in future GM profits.
* A major gain in the GM pact, as in the Ford agreement, according to UAW president Douglas Fraser, was the establishment of ''a more civilized and rational way'' to reduce work forces through attrition rather than layoffs.
* For its part, the union agreed to a 2 1/2 year freeze on wages, no cost-of-living payments for nine months, and the loss of a number of paid personal holidays.
The GM agreement now moves along to the union's General Motors Council of 290 local union officials, scheduled to meet March 25, and then on to GM rank-and-file unionists for final ratification. Approval is expected, although there is dissatisfaction about the agreement, particularly in the ranks of those who have been laid off.
To the union, the concessions given Ford and GM put the responsibility for improving the fortunes of the auto industry squarely on management. According to union president Fraser, the union has done its part to stop massive layoffs and plant closings.
''It's now up to the companies,'' Mr. Fraser said in Detroit.
The new contracts aren't likely to turn the industry around automatically. They do not guarantee profits or wipe out the competitive advantage of foreign carmakers. Moreover, they provide no long-term solutions to other underlying problems in the industry.
But they do give Ford and GM more time and greater financial means to develop new products and cut production costs. These steps, the carmakers hope, will win back larger shares of domestic and foreign markets.
The contracts probably won't mean lower car prices. Cost savings will not be passed automatically to customers.
Alfred S. Warren Jr., vice-president for industrial relations for GM, said, ''We are very, very pleased at the things we got,'' including not only economic concessions but also flexibility to change some restrictive work rules.
GM negotiations developed serious problems just before a March 21 informal deadline. However, a final day-and-a-half of tough talks brought success. For UAW, Fraser said, ''We came to the negotiations seeking greater job security for workers and we have been successful.''
The Ford settlement also dispelled the concerns of GM workers that they would get nothing in return for economic concessions.