Labor and management in the auto industry open the grand finale of contract bargaining for 1979 this week amid widespread predictions of a General Motors strike in September that could further aggravate the nation's already faltering economy.
Also at stake in the months of negotiations between the Big Three auto makers and the powerful United Auto Workers is the Carter administration's battered program of voluntary wage restraints - for which the UAW already has written an advance obituary.
In opening ceremonies with GM on Monday, Ford Motor Co. on Tuesday and Chrysler Corp. on Wednesday, UAW President Douglas A. Fraser will outline his case for substantial wage, benefits and time-off gains in keeping with the UAW's reputation as the country's pace-setting industrial union.
The size of the proposed package is expected to bear no resemblance to the administration's guideline of 7 percent a year for wage and benefit increases, which already was stretched by the Teamsters and breached by unions representing aircraft machinists and rubber workers.
The auto industry bargaining will not come to a head until late August or early September, shortly before the current three-year contract expires on Sept. 14. At that point the union will choose one of the three companies as the bargaining target for an industrywide pattern for the union's 650,000 Big Three workers.
UAW leaders say they have not designated GM as its bargaining - and strike - target. Moreover, they, like their industry counterparts, insist that a peaceful settlement is achievable.
But industry observers agree that GM is the likely target and that a strike of some duration is probable, although there is little agreement on how long it might last and hence the extent of the economic impact.
History argues for both GM and a strike.
Ford was the target in 1976, and the union rarely, if ever, chooses the same company two times in a row. Chrysler was the target in 1973 and now is so shaky financially that the union is considered unlikely to risk more plant closures by striking the company. This leaves GM, the biggest and strongest. GM was last struck in 1970, when the union shut it down for 67 days.
While some industry observers suggest that a strike is not inevitable, especially if the economy is in a deep nosedive, they note that the industry has not had a strike-less settlement in five rounds of bargaining since 1964.
Another GM strike of 67 days could have a wrenching effect on the national economy, particularly if the current recession has deepened by them, many economic analysts say. A long strike would be a "sizeable jolt" that would "make any recession harder and worse than it would otherwise be," said F. Gerard Adams, an economic forecaster at the University of Pennsylvania.
Calculating on the basis of a 90-day strike, Adams figures the cost of a GM work stoppage at $28 billion, or one percent of the gross national product. Data Resources Inc., an economic research firm, figures a shorter strike of no more than 15 days is more likely, with little, if any, overall effect on the economy. But a 75-day strike, Data Resources says, could cause a drop of nearly 2 percent in the GNP and layoffs at nearly 1 million workers.
On Wall Street, a number of analysts are reportedly predicting a strike of six weeks or more.
In any case, the UAW is preparing for all eventualities. As of late May, its strike fund amounted to nearly $280 million and is believed likely to be considerably fatter by September. By contrast, the strike fund totalled only $171 million at the end of June three years ago.
If GM is the giant of American industry, the UAW is the giant of the country's industrial unions, conceded even by some leading industry officials to be the best-run and most socially responsible of all unions. A kind of "world-class tournament of collective bargaining," one observer called it.
But both carry burdens to the bargaining table.
Even GM, the runaway leader in auto sales, has been hit by the recent plummeting of sales, reflecting both gasoline supply shortages and, some observers say, the first warning signs of a recession. It must also rely more heavily for profits on domestic production than does Ford, which has vast operations abroad. It also faces staggering costs of about $400 million over the next two years in meeting government auto emission standards unless the standards are relaxed.
One auto executive who is optimistic that a strike can be avoided points to the UAW's own strengths as a powerful inducement for a peaceful settlement; high wages, a solid portfolio of benefits, popular and sure-footed leaders and a "social conscience" that may be bothered by the idea of aggravating the nation's economic troubles.
"The UAW won't back away from the things it really feels it needs," said an economist in close touch with the industry, "but it won't act irresponsibly either."
The union may have another, more immediate, problem. Later this week workers at one of GM's new "Sunbelt" plants, a big assembly plant in Oklahoma City, will vote on whether to bring in the UAW as their bargaining agent. A defeat for the union would leave a big hole in its now solid assembly-plant ranks, a substantial setback just as bargaining begins.
Auto workers currently earn an average of about $9 an hour, with about $5.50 more in fringe benefits, making them among the highest paid blue-collar workers in the country. But they contend they deserve to keep this status in light of the industry's normal productivity and profitability.
In addition to higher wages, improvement in cost-of-living protection, expanded benefits and more time off, Fraser has pinpointed pension improvements, especially for already retired workers, as a major bargaining goal.
Unlike some union leaders who have pointedly vowed to defy the administration's 7 percent wage guideline, Fraser has simply declared it dead - not once but many times. He has also told the administration to "stay the hell out" of his contract bargaining. But GM President Thomas Murphy has taken the lead among industrialists in advocating compliance with the wage and price standards.
All of this puts President Carter in a difficult position.
The UAW gave Carter crucial early support in 1976, and Fraser, while critical of Carter's economic policies, has urged union leaders not to cut all ties because they may well wind up with Carter as the only viable alternative for 1980.
But a UAW settlement on the order of the guideline-busting package won recently by the United Rubber Workers, a smaller and weaker union, could bury the guidelines so deeply that even the administration couldn't resurrect them.And how long, some observers ask, would the administration stand by as an auto strike plunges the country deep into a recession - just as 1980 rolls around?