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The downside of the G.M. contract: rank-and-file doubts.

Business Week called it "The right Kind of Auto Contract," and the rest of the media concurred: the United Automobile workers' agreement with General motors means there will be no disruptive national strike, that workers' wage increases will be modest enough to allow G.M. to sustain its competitive position in the world automobile industry and that employees facing layoffs will be protected, while the company maintains the flexibility it needs to boost productivity. But the contract settlement has a darker side, which the media largely ignored. All over the country, U.A.W. members have voiced frustration with what they view as their leaders' failure to win adequate guarantees of job security or to regain what was lost in the concessionary settlement of 1982.

Such contradictory responses are hardly surprising. When bargaining began, union members were furious with a company that had extracted painful concessions one year and had awarded managers $181.7 million in bonuses the next, that had assigned 70,000 full-time jobs' worth of overtime when 51,000 auto workers were still laid off and that was planning, according to a memorandum by G.M. vice president Alfred Warren, to eliminate as many as 100,000 jobs in the near future. restraining unionists so sorely provoked would not be easy, especially when news reports indicated that the company was raking in record profits.

But G.M. threatened to step up plans to produce parts and even whole cars overseas if U.A.W. leaders caved in to rank-and-file demands for a rich contract. Then there was the political angle. Fearing the public would blame Walter Mondale for their intransigence, the union's leaders did not want to strike this fall. They also worried that a prolonged strike could undermine Congressional support for the U.A.W.-backed domestic-content legislation, and could even embolden President reagan to call for a halt to the "voluntary" export restraints that were extracted from the Japanese and that currently protect the jobs of hundreds of thousands of American auto workers.

The fact that under such circumstances U.A.W. negotiators were able to fashion an agreement acceptable to management and to 57.7 percent of union members may indeed be the remarkable achievement hailed by the media. But the margin of ratification, fifteen percentage points, is very low by the union's standards: until the concessionary agreement of 1982, U.A.W. national contracts traditionally carried by at least seventy percentage points.

There is probably even less support for the contract than the narrow margin suggests. John Lukes, recording secretary of Buick Local 599 in Flint, Michigan, the union's largest G.M. local, reports that members attending an informational meeting prior to the vote vociferously denounced the contract. A week later, the local voted to ratify, 65 percent to 35 percent. As Lukes sees it, members thought they had no alternative. "No one thought G.M. would give more without a long strike, and we knew our leadership didn't want a long strike," he says.

The 1984 contract contains pioneering job-security provisions, wage and pension improvements, early-retirement sweeteners establishment of a child-care pilot program (for the first time in a national auto contract), elimination of some unpopular penalties for absenteeism, extension of the guaranteed-income program for employees with long seniority, continuation of profit-sharing, establishment of a $100 million fund for job-creating ventures and much more (the U.A.W.'s summary of the contract ran twenty-four pages). Even so, many workers are deeply disappointed with both the job-security clauses and the wage package.

At the heart of the job-security proposal is a job bank to which G.M. agreed to contribute up to $1 billion over six years. Workers with at least one year's seniority who are laid off because of technological improvements or subcontracting of parts will be selected by committees composed of union and management representatives to train for future work in the auto industry, fill in for others receiving training or perform new jobs. Workers will receive their former wages, and selection will continue until G.M.'s $1 billion is exhausted.

One member of the U.A.W.'s research staff predicted that the company would use the job bank to train 4,000 workers at any given time. After acquiring versatility, they would be assigned to fill jobs opened up by retirements and resignations. If attrition runs at a normal rate, and 45,000 to 50,000 workers resign or retire by the end of the six-year period, the job bank would help the union preserve the jobs of just about all those displaced.

The provision provoked intense controversy during the ratification period, partly because of its complexity. Brain Mitchell, president of the local at G.M.'s foundry in Danville, Illinois, believes many local presidents took no position on the contract because they did not understand how the job bank would work. Another worker, normally a loyalist, told me that G.M. executives could take the proposal and "shove it up their ass." When I repeated to him the U.A.W. research department's rationale for the job bank, he responded, "That's a pretty good argument. We sure never heard that here."

The job bank, however, does not protect those laid off because of reductions in the company's sales volume or because of decisions to produce or buy cars overseas and sell them in the United States under the G.M. label. Sales are impossible to forecast, but the U.A.W. research department staff member I spoke with predicted that by the end of 1987, the weakening of trade restraints will enable G.M. to import 400,000 cars a year, which translates to a loss of 22,000 jobs.

The company's refusal to rule out decisions to produce or buy cars overseas drew the most praise in the business press and the most criticism within the union. Peter Kelley, the only member of the U.A.W. negotiating committee to oppose the agreement, charges that the contract provides no job security and leaves the company free to shift its production wherever it chooses. Kelley says the union should have offered to take smaller wage increases in exchange for a shorter workweek and work year, and fatter pensions to stimulate early retirement. Mitchell has a more typical reaction: the job bank does not give employees the security they expected to get, but trade restraints, not collective bargaining, provide workers their best hope for job security. "It's got to come from legislation," he says.

The contract's wage package was equally controversial. First, despite G.M.'s record profits, workers will get smaller raises than they had prior to 1982. instead of the 3 percent "annual improvement factor" the U.A.W. achieved twenty years ago to insure that workers would share in the company's productivity gains, the current contract provides for a 2.25 percent wage boost in the first year. in the next two years, employees will receive "performance bonuses." These lump-sum payments will not become part of the basic wage rate at G.M., nor will they be counted in vacation pay and other benefits that are computed as a proportion of hourly wage rates.

Second, the union was forced to abandon its tradition of minimizing pay differentials among its members. In the first year, the increase in the hourly wage rate of die designers will be more than four times higher than that of floor sweepers. G.M. negotiators argued that the discrepancy was necessary because new technology was placing greater demands on highly skilled workers; U.A.W. negotiators went along because those workers have been increasingly angry about management's attempts to blur craft distinctions: for example, its insistence that electricians also weld and operate heavy equipment. Unionists in the lower wage classifications are, naturally, displeased with a first-year increase of just 9 cents an hour.

Third, while the union thwarted G.M.'s efforts to revamp the cost-of-living formula, it did accept a one-time cut in cost-of-living adjustments. Negotiators accepted a 13-cents-an-hour deduction from those adjustments to pay for some of the improved benefits in the contract without raising employment costs above the limit the company insisted on.

Pensions were raised 30 percent over three years, to $1,205 a month, which, U.A.W. staff members proudly point out, is well above what most Americans receive. But even the pact's defenders, like Brian Mitchell, are disappointed that the union wasn't able to gain an automatic cost-of-living adjustment for pension benefits.

One member of the union's research department estimates that G.M.'s overall labor costs will increase 21 percent over three years, compared with 35 percent in contracts that contained the annual improvement factor. Given the altered economic climate, the difference may not seem unreasonable, but there are signs that troubles lie ahead for both company and union.

During the ratification period, workers picked up on a provision that seems minor: a dues increase. While the lump-sum payments to be granted in the second and third year will not figure in vacation pay, they will count as wages when membership dues are deducted from an employee's paycheck. For the first time in U.A.W. history, a dues increase was negotiated with the boss rather than voted by the union's convention delegates. Although the sum involved is paltry, union members were furious, and for a few days it seemed they might even reject the contract. Ultimately, the U.A.W. International's efforts to explain the contract to unionists throughout the country, as well as union president Oven Bieber's threat that members would immediately go on strike if they rejected the contract, turned the tide.

The anger at the contractual dues increase reflects the rank and file's growing frustration with the union's inability to curb company abuses. Although G.M. decides to shift work outside the bargaining unit, to rely on overtime or to force relaxation of work rules, members are displacing a good deal of their resentment for those practices on the union. That explains why so many incumbent U.A.W. local leaders were defeated in last spring's elections. And it at least partially explains why so many of the newly elected union leaders were afraid to support the proposed G.M. agreement.

Veteran labor journalist B.J. Widick says that dissatisfaction with the agreement will also endanger labor-management efforts to forge a "cooperative relationship" through programs, loosely modeled on Japanese quality circles, in which workers meet with management to make suggestions and discuss how to improve their work. "Quality-of-worklife programs will go down the tubes," Widick predicted. "By outsmarting the U.A.W., G.M. will create troubles for itself."

Other observers are more cautious in their predictions. "Quality-of-worklife programs may not get the publicity they once did," John Lukes argues, "but as for the long-term impact on the union, it's too soon to tell." Joe Finkbeiner, a union activist working at the Lansing Labor News, disagrees. He says that Bieber's threat not to resume negotiations with G.M. hurt him politically but thinks the ratification fight "in the long run will be positive because it will make the leadership talk to the members more."

As corporations use their ability to move capital around the world to force workders to reduce their expectations and increase production, unions face an ever more difficult task. The United Automobile Workers, with its politically skillful leaders, creative professional staff and sophisticated membership, is better equipped to meet the challenge than most other unions. Nevertheless, as the negotiations with G.M. revealed, it's hard to protect workers' interests in an unfavorable political and economic environment. And within five years, there will be 80,000 fewer union members at General Motors.

Today as auto workers return to the assembly lines, G.M. executives return to their board rooms to plan the world-wide operations that will get rid of workers's jobs. If the U.A.W. is to make any headway in this difficult situation before the next contracts come up, the International's leaders must first win back the trust of the rank and file.
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Author:Bensman, David
Publication:The Nation
Date:Nov 3, 1984
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