'New' GM-UAW pact builds on '82
The contract that members of the United Automobile Workers (UAW) began voting on Thursday is most notable for what it will not do, labor analysts say. The UAW's General Motors Council approved the 417-page pact Wednesday and by Oct. 14, 149 UAW locals in 27 states will have voted on it. Union president Owen Bieber told council members that ''I am not going to stand here and tell you we've reached utopia.'' However, he asserted that ''it's a solid agreement.''
The UAW is keeping the text of the agreement secret until it is ratified, although summaries have been distributed to union members and the press. Based on available information, the job-security provisions in the pact seem to be extensions of similar provisions in previous contracts, outside observers say.
The current job-security plan centers on a $1 billion fund. It would be used to pay and retrain workers for up to six years. The workers must have had more than one year of seniority and must have been laid off as a result of new technology, production subcontracted outside of GM, or productivity improvements.
''This is more like an amendment or an elaboration of what they started in 1982,'' says Daniel Mitchell, director of the Institute for Industrial Relations at the University of California at Los Angeles. That year, GM agreed to provide a guaranteed income to workers with 15 years of seniority who were laid off.
At best, the new job-security provisions will have only a modest effect on the decline in the number of people employed in building automobiles, some observers say.
In effect, ''GM has paid $1 billion for a license'' to reduce the work force, says Audrey Freedman, a labor economist at the Conference Board. ''They could lay off 40,000 people in one year.'' She notes that a rapid decline in the work force is quite possible, given the ''enormous'' plans auto companies have for investing in automated production equipment this year.
Peter Kelly, a member of Mr. Bieber's negotiating team, also noted the relative lack of job protection in the contract. ''No one is protected against plant closing, outsourcing, or new technology,'' he said. Mr. Kelly issued a formal minority report Wednesday, urging the rank and file to reject the contract.
Wage increases over the three-year life of the contract are not as moderate as their 2.25 percent average annual rate first appears. They will do little, if anything, to close the gap between US auto workers and their lower-paid Japanese counterparts, some experts argue.
While compensation would rise only about half as much as the contract the union won in 1979, the '84 agreement will still boost workers' wages roughly 20 percent over three years, after including cost-of-living adjustments (COLAs) based on a steady 5 percent inflation rate over the period. After figuring in profit sharing and other provisions, however, the average auto worker will pocket about $12,000 more over the three-year period, the UAW calculates.
''What you call moderate depends on what has happened to wages in the industry in the past and what the competition is,'' says Marvin Kosters, a labor economist at the American Enterprise Institute. The contract ''suggests a further rise in (auto workers') wages relative to the average worker in the economy and can only mean a worsening of their competitive position'' vis-a-vis Japan.
These higher wage costs to some extent will be offset by cost reductions resulting from increased automation and from buying more vehicles from overseas suppliers such as South Korea and Japan. The contract preserves GM's freedom to do both.
A breakdown in so-called pattern bargaining, where one industry follows another, means the UAW-GM pact, if approved by the rank and file, will have relatively little effect on other sectors of the economy, analysts say.
''I don't think it will have any impact on wage patterns'' elsewhere, Mrs. Freedman notes. Competition from foreign companies has ''broken apart'' previous pattern-bargaining arrangements. Under such arrangements, for example, rubber workers would seek to duplicate the terms of the UAW's contract.
However, the job-security plan, if well received by the UAW membership, might have some appeal in industries such as steel, which face stiff foreign competition and need to trim their work force, Mr. Mitchell says.
He notes that while the $1 billion job fund will not keep GM from laying off workers, it will boost their cost of doing so. Thus it could ''tend to discourage'' the firm from technology or outsourcing related layoffs, which do not have a big payoff for GM.
However, Thomas O'Grady of Chase Econometrics says the contract is more significant than many observers realize. For example, the $1 billion fund is ''a very nice, very big step'' toward allowing companies greater flexibility in assigning workers to jobs.
The UAW contract's effect on inflation is expected to be modest, says Robert Gough, senior vice-president at Data Resources Inc. DRI estimates that auto prices will rise about 3 percent in 1985, vs. 2 percent this year. The new UAW pact accounts for about 0.8 of a percentage point of the '85 price hike. In 1986 and '87 car prices are expected to climb at a 5 to 6 percent annual rate, with the new contract accounting for between 1 and 1.5 percentage points of the increase.