Evening star., 1950-05-24
General Motors Paid
Big Price for Promise
OF 5-Year Stability
Union Contract Ruises
Question Of implications
For Other Businesses
By David Laurence

~ Dana Laurence
If the flve-year agreement really
is honored and the union can keep
its members from striking when
the cost-of-living index forces a
wage cut-then something new
and encouraging will have been
introduced in labor-management
relations by the latest settlement
between General Motors and the
United Automobile Workers Union
(CIO).
The company apparently was
willing to pay substantial price
for at least promise Of stability
in the next five years. Much more
important is how the agreement
was made and what the implica-
tionS are for other businesses and
other labor unions and whether
competition has been promoted by
the episode.
What we are witnessing is a
curious twist to the idea of big
ness. Only a big labor union could
make such an agreement as that
with General Motors and only a
big company could take the finan-
cial risks involved in it. Bigness
may now become virtuous in the
eyes of union leaders-for that's
the way they can make their big
gest gains.
Wage Leadership Set.
To the smaller units in busi-
ness, it isn't so encouraging. For
1t sets a pace that only the big
companies can maintain. Just as
there is price leadership in in
dustry. there now is wage lead
ership. Whatever the biggest and
most successful company is will
ing to pay, the weaker competitor
is forced to pay also.
The General Motors settlement
was made possible by the Chrysler
and Ford contests with the unions.
Now that General Motors has
made settlement which in some
respects is better than the auto
workers union got from either
Chrysler or Ford. the way is
opened for renewed demands next
year to increase wages in the
other companies.
The General Motors agreement
will be hailed as victory for COL
lective bargaining. In a sense,
that is true, but when a big union
is permitted to play one competi-
tor against another and cash in on
the advances gained in battle
with another company, where COL
lective bargaining was prolonged
and bitter, the sweet reasonable
ness apparently manifested in the
later contest can hardly be ex-
pected to start an era of brother
ly love in the industry as a whole.
The truth of the matter is that
the auto workers union took a
licking in the Chrysler strike and
shrewdly negotiated a settlement
with General Motors that avoided
a strike. One necessary step was
to paint the settlement this week
as a great achievement for the
union. So far as pensions are
concerned, the cry that in this
instance pensions "better than
$l00 month" are to be paid
means that the $125-a-month de-
mand by the union was not
granted. ..
But General Motors did make
several concessions on the pen
sion issue and on the so-called
social benefits. 1t increased wage
scales in certain skilled-labor
classifications and, in return, the
union gave way somewhat on the
union shop issue and on several
other items, including the usual
demand for yearly reopening of
contract issues.
Executives May Shiver.
What General Motors did may
send shivers up and down the
spines of some executives in other
industries. For the leading COM
pany in the auto industry has, in
effect, agreed to add to the pen
sions certain sums that will be
imposed through new payments
by the expected change in Fed
eral law on social security.
Heretofore many companies
have assumed that their pension
load would be diminished by the
amount that the Federal Govern
ment would add in the way of
pension income. Some existing
agreements in the steel industry
already provide this. While it is
true that these contracts, in the
main, cannot be reopened for five
years on the pension issue, the
unions can readily use their de-
mand for it to trade with in
withdrawing some other demand
for higher wages. This will hap
pen. OF course, where reopening
clauses on wage issues are avail
able to the unions.
The modified union shop that
was granted by General Motors
is not as the unions would like
1t. New employees must join a
union but can withdraw within a
year without losing their jobs.
Old employees are frozen in the
union for five years if they are
already members. Non-union en-
ployes can retain their jobs and
refrain from joining union.
Compulsory membership of any
kind in a union is, of course, a
denial of civil rights. 1t is far
worse than any of the other at
tempts nowadays to control a
mans beliefs. This is something
liberals" cry out against in
everything else except union mat
tiers. But here it is in a labor
Union agreement YevertheleSS