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Collective Bargaining in 1982: Results Dictated by Economy

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Collective Bargaining in 1982: Results Dictated by Economy Collective bargaining in 1982: results dictated by economy In some cases, workers exchanged wage-and-benefit improvements for increased job security and some voice in management, as industries were beset by intensijied economic problems Economic difficulties for labor, management, and the erage adjustments of 3.3 percent for the first contract Nation continued in 1982, as the rate of unemployment year, and 2.5 percent over the contract term-the rose to the highest level since 1940, the rate of business smallest adjustments in the 17-year history of the com- failures rose to the highest level since the Great pensation data series.' Depression, and factory use fell to the lowest level in the The number of concession agreements2and the num- 35-year history of the statistical series. ber of workers affected by them clearly exceeded 1981 As the year ended, some economic indicators showed levels reflecting, to some extent, the "heavy" bargaining improvements, but the unemployment rate continued to year and the increase in unscheduled bargaining. Only rise. As a result of the mixed economic signals, there three of the "pattern bargaining" industries that negoti- was no consensus on whether the country was coming ated during the year settled on "normal" terms (that is, out of the recession and, if so, how strong the recovery wage and benefit gains for employees, with no "give- would be and how long it would last. backs9')-petroleum refining and petrochemicals, appar- Considering the state of the economy, it is not sur- el, and electrical equipment manufacturing. In indus- prising that major collective bargaining settlements tries where there is no widespread pattern approach, (those covering 1,000 workers or more) in the private such as construction and retail trade, settlements gener- economy during the first 9 months provided for the ally provided for gains for workers, although a few, es- smallest wage adjustments since the Bureau of Labor pecially in retail food, called for concession^.^ Statistics began compiling such data in 1967. First con- tract-year adjustments averaged 3.8 percent, a signifi- Auto industry still ailing cant drop from the 8.3-percent adjustment when the The automobile industry was involved in a number of same parties last settled (usually 2 to 3 years earlier). developments, including a downturn in sales that result- The annual rate of adjustment averaged over the life of ed in corporate operating losses; continuing layoffs; the agreements negotiated during the 9-month period unscheduled contract reopenings that resulted in agree- was 3.5 percent, compared with 6.4 percent when the ments forgoing specified wage increases in exchange for parties last settled. Similarly, compensation (wages and improved job security provisions; layoffs and compensa- benefits combined) in settlements covering 5,000 work- tion cuts for nonunion white-collar employees; adoption ers or more during the 9-month period provided for av- by Japanese manufacturers of a voluntary limit on auto exports to the United States; and continuing pressure George Ruben is co-editor of Current Wage Developments, a monthly by the Auto Workers for "local content" legislation re- publication of the Bureau of Labor Statistics. quiring foreign producers to use a percentage of Ameri- can-made parts in vehicles they sell in the United rums. The forums will give workers a voice in manage- States. ment decisions, and will operate at the national and In 1981, GM, Ford, and American Motors began plant levels. The director of the UAW Ford Department pressing the United Auto Workers (UAW)for labor cost will address the company's board of directors twice a relief, contending that they were at a competitive disad- year. (The first instance of formal union participation in vantage with foreign manufacturers, as well as with management of an auto company occurred in 1980, Chrysler Corp., which had benefited from cost conces- when UAW President Fraser was elected to Chrysler's sions negotiated in 1979, 1980, and 1981. (Prior to. board of directors as part of the wage concession settle- 1979, UAw contracts with the "Big 3" companies-GM, ment.) The settlement also featured a profit-sharing Ford, and Chrysler-had provided for essentially iden- plan. tical wage and benefit levels. American Motors was on The settlement at Ford induced the UAW and General a different bargaining cycle and its labor costs were al- Motors to resume negotiations, which resulted in a set- ready lower than those of the Big 3 companies.) tlement comparable to Ford, with several differences: The round of early renewals of contracts started in (1) GM specifically agreed to reopen four of six plants it late 1981 with discussions between UAW and GM offi- had closed in recent months (at Ford, there was no cials. During these talks, GM accepted the union's pro- such specific commitment); (2) the Guaranteed Income posal to pass any labor cost savings resulting from con- Stream program will cover laid-off workers with 10 cessions to vehicle purchasers through price reductions. years of service; (3) the new profit-sharing plan was less However, bargaining ended in late January without a liberal than at Ford (however, UAW officials contended settlement. UAW President Douglas Fraser said the that GM employees would generally fare better because negotiations broke down over three issues: job se- GM has usually been more profitable than Ford); and curity, use of outside contractors-particularly foreign (4) a legal services plan replaced increased company fi- firms-and how GM would carry out its promise to re- nancing of Supplemental Unemployment Benefits nego- duce vehicle prices by the amount of labor cost conces- tiated at Ford. sions. After the GM settlement, the UAw's bargaining focus Negotiations proceeded more smoothly at Ford, shifted to American Motors Corp. A settlement was where a settlement was reached in mid-February. The reached in May for 14,000 workers. Under this con- new contract did not provide for specified wage in- tract, employees will lend the company $1 10 million, to creases, but it retained the automatic cost-of-living pay be accumulated by deferring specified wage increases adjustment formula. Ford gained some cost relief be- and automatic quarterly cost-of-living adjustments, and cause each of the first three quarterly adjustments was by "banking" money, that is, giving up 21 days of holi- to be reduced by 2 cents an hour and deferred for 18 day and vacation pay by the end of 1984. Between 1985 months. Other changes beneficial to Ford were longer and 1989, American Motors must repay the entire $1 10 pay progression schedules for new workers, longer wait- million, plus 10 percent interest. The American Motors ing periods before new workers are eligible for certain contract expires in September 1985, 1 year later than insurance benefits, and elimination of paid personal hol- those at Ford and GM.~ idays. The union was successful in its major goal, attaining Next, bargaining began at Chrysler Corp. The UAW 's greater job security for its members. Ford agreed to a chief demand was for a reduction in the estimated $2.60 number of changes intended to preserve jobs or at least an hour pay disparity with GM and Ford workers that aid laid-off workers. Other changes beneficial to workers had resulted from the three concession settlements at included a 2-year moratorium on plant closings that Chrysler. The company and union reached a tentative would have occurred as a result of "outsourcing" (pur- agreement in mid-September, but the employees turned chasing parts and services from outside firms, to the it down, primarily because it did not provide for an im- detriment of Ford workers), and a company pledge to mediate wage increase. make every effort to maintain the current work force After the rejection, the parties resumed negotiations, and to handle future cuts through attrition, rather than but Chrysler continued to maintain that it could not af- layoffs. ford an immediate wage increase. The workers' de- The parties moved toward a lifetime pay guarantee mands stemmed, in part, from the fact that Chrysler by adopting a Guaranteed Income Stream covering had accumulated $1 billion from sales of property and workers with at least 15 years of service laid off after vehicles. Chrysler said the money was needed for new the effective date of the agreement. The payments will product development. continue until the participant becomes eligible to retire Finally, in early December, the parties agreed on a or attains age 62. 13-month contract that provided for an immediate pay Acknowledging the need for cooperation, the parties increase averaging 75 cents an hour; resumption of au- provided for the establishment of Mutual Growth Fo- tomatic quarterly cost-of-living pay adjustments; and 29 MONTHLY LABOR REVIEW January 1983 Collective Bargaining in 1982 adoption of Lifetime Job Security projects similar Plant closings. In August, Firestone gave the Rubber to those at Ford and GM. Workers the required 6 months notice of intent to close its 45-year-old plant in Memphis, Tenn., despite a num- Rubber Workers avoid 'give backs' ber of work-rules changes the workers had accepted in The United Rubber Workers union entered 1982 ne- 1980 to increase efficiency. Declining demand for medi- gotiations with the Big Four rubber companies, and um and heavy duty bias ply truck tires was behind the others, vowing not to grant any wage-and-benefit con- closing. At the time of the announcement, the plant em- cessions and largely succeeded, although the 1982 terms ployed 1,100 workers, with an additional 850 on layoff. were not as liberal as those in the 1979 accords. The At the same time, Firestone announced that it would year also was marked by plant closings, a continuing close its Nashville, Tenn., radial truck tire plant if the drop in sales by U.S.
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