Jobs and the auto industry
THE tentative United Automobile Workers pact with Ford is a landmark settlement. In virtually guaranteeing job security for Ford's hourly work force of 104,000 men and women, management and labor have drafted a formula that will be studied by bargaining agents throughout the United States. The new contract will presumably be ratified by Ford workers. From their perspective, it should be. The pact could raise the cost of a Ford car by some $400, thus making Ford products slightly less competitive in the marketplace; still, the contract specifies that in most cases Ford will not lay off any permanent workers over the three years of the contract. The contract does provide for certain exceptions, such as an economic downturn.Skip to next paragraph
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As Japan has shown, job stability benefits an industry. The problem is that US firms often differ fundamentally from each other - much more so than in Japan.
The UAW wants a similar job security agreement with General Motors. Yet, Ford has sharply reduced its work force. It has closed marginal plants. GM has not done so. If the UAW does not prod GM into accepting the Ford pattern, the result could be a strike at GM.
That would be unfortunate. The economy continues to expand - at a 2.5 percent rate in the spring, new data show. A GM strike would not check that growth - GM has a large backlog of cars - but it would hurt companies linked to GM.
The UAW and GM need not reach an impasse. GM needs to stay competitive. The quest for job stability must be balanced with the need for corporate creativity. That alone can ensure the well-being of a company - and thus, jobs.