The punch that staggered the auto industry this year has not landed evenly.
Restrictions in a special federal aid program mean that the unemployed autoworkers who once assembled Ford, Chrysler and General Motors products face a far less gloomy future than their counterparts who built the bumpers, seat belts and hundreds of other parts for the industry's independent suppliers.
Unemployed auto workers can look forward to a year of tax-free jobless benefits equal to 70 percent of their weekly wage up to $269 a week, thanks to the Trade Adjustment Assistance Act. The Labor Department this spring made auto company employes eligible for the special aid, concluding that the surge in foreign car imports during the past year was a significant reason for their unemployment.
Not so the employes of Press Products Co. of Troy, Mich, which makes door and hood hinges; the New Haven Foundry in New Haven, Mich., an auto parts manufacturer; Formed Tubes, Inc., of Sturgis, Mich., an auto parts manufacturer; Formed Tubes, Inc., of Sturgis, Mich., which produces auto tail pipes; or the other 450,000 employes of independent auto industry suppliers.
The benefits of the Trade Adjustment Assistance Act in most cases are not extended to these workers, because the specific product they make has not been directly injured by foreign import competition. Instead, these workers are dependent on unemployment insurance benefits equal to half their average weekly wage, for no more than 39 weeks. In some areas of Michigan, where auto industry layoffs began last fall, the eligibility period is running out.
The distinction between workers in one category and workers in another is a fine one, concedes Harold A. Bratt, deputy director of the Labor Department program.
A General Motors employe who manufactures car bumpers qualifies for the extra benefits. An employe of the Budd Corp., which makes other car bumpers that GM buys, is not, even though both are equally affected by the worse slump in auto sales in a generation. "I'm not defending it," said Bratt. "But that's the distinction in the law."
Toyota, Volkswagen and other foreign manufacturers generally ship assembled cars to the United States, not bumpers, tail pipes, seat belts or windows, he explained. Under the law as the government interprets it, sales of a particular U.S. product must be directly injured by imports of the same kind in order for the manufacturer to qualify for trade adjustment assistance.
The restriction was written by Congress to keep the program's costs under control.
Trade Adjustment Assistance payments have averaged about $260 a year since 1977, with steel workers leading the list of beneficiaries. The Labor Department now says it will need $1.5 billion for the program in the 1980 fiscal year, and $850 million for fiscal 1981 beginning in October.
On Wednesday, an attempt by Rep. Charles Vanik (D-Ohio) to extend the program's benefits to independent suppliers was defeated 16 to 17 in the House Ways and Means Committee, and the measure appears finished this year. hIts approval would have increased payments by another $800 million, according to the Congressional Budget Office.
The applications for Trade Adjustment Assistance continue to pour in to the Labor Department from auto industry suppliers and service firms, despite the hopelessness of the cause.
"We're turning down about three cases out of four," said Bratt, who has faced angry audiences in Saginaw, Mich., and other auto industry centers, trying to explain the program, and has not relished the task.
The program looks like a lifeline and people grab for it, he said: hundreds of car dealers, truckers and haulers who transport cars from factories, even a Michigan pig farmer whose fortunes have sunk along with the entire Michigan economy.
In a country where one out of eight jobs are related directly or indirectly to the auto industry, the line on Trade Adjustment Assistance has to be drawn somewhere. But it pulls hardest around Michigan, Ohio, Pennsylvania, Indiana and Illinois -- where the auto plants and their suppliers have long lived side by side.