Victory of the Auto Workers: From November 28, 1970

Editors note: In this weeks America, columnist Terry Golway analyzes the latest agreement between GM and its workers. Back in 1970, the editors assessed the future of the American auto industry in the wake of a historic strike by the UAW:

For General Motors workers, the settlement reached after two months on the picket line was, indeed, a glorious victory. On the three major issues in contention--wages, cost-of-living formula and pensions--President Leonard Woodcock and his UAW negotiating team substantially achieved their aims. In their first major test since the death of Walter Reuther, they won the best contract ever negotiated with the nations top auto maker.

In the initial year of the contract, wages of the average $4-an-hour worker will rise 51 cents, or about $20 a week. The second and third years of the contract will bring minimum annual increases of 14 cents an hour. At straight-time pay for 40 hours, that means a weekly wage of $191.60 in 1972. And the word "minimum" must be emphasized, since the union was largely successful in regaining the full cost-of-living adjustment that it traded off three years ago for other benefits. Finally, GM agreed to sweeten the pension pot, so that workers with 30 years of service can retire at 58 (56 by the end of the contract) with a guaranteed $500 a month.

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Victories like that arent cheap. GMs wage bill alone, not counting fringe benefits, will cost an additional $2.4 billion over the three-year period. Since no foreseeable increase in productivity can offset these higher labor costs, autoists will have to pay more for GM cars. Some of the workers even may have to pay in the form of longer layoffs, since the settlement gives a competitive edge to foreign imports, which have already captured a seventh of the domestic market. About all one can say is that the contract is at least more realistic than earlier bargains in construction, trucking and New York newspaper publishing. It isnt even as expensive as the wage settlement recommended by a Presidential emergency board in the rail dispute.

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