The nation's coal mine owners yesterday first defiantly rejected, then under pressure accepted, President Carter's call for an immediate resumption of talks to end the 72-day coal strike.
The White House scheduled the first bargaining session for last night, with Carter to open the meeting.
The resumption of talks came as the Federal Reserve Board reported that U.S. industrial output fell 0.7 percent last month, the most in any month since the 1974-75 recession. But the board said the coal strike was only one of several reasons for the decline, and administration economists said they believe the strike will seriously affect the economy as a whole for at least another month.
The mine operators' dramatic about-face, which saved the White House from a humiliating rebuff, came only after heavy pressure was exerted by both the administration and top-level officials of a number of large coal-consuming and other affected corporations, sources said.
Also a factor was a concession by Arnold Miller, embattled president of the internally fractured United Mine Workers union, to expand his negotiating team to include members of the union's rebellious bargaining council.
Theoretically, this could make it easier to sell a contract to the council, which triggered the current standoff by rejecting a proposed settlement last weekend.
However, there is still no guarantee of a quick settlement to the record-length coal strike, which has idled 160,000 miners, cut coal production by two-thirds and caused power curtailments and warnings of tens of thousands of job layoffs in many Midwestern and Mid-Atlantic states.
The coal operators are not expected the yield easily on key points of the earlier contract proposal that raised the biggest outcry from the bargaining council, including wildcat strike curbs and cost controls for medical and pension programs. Nor are the union's internal problems solved.
Faced with mounting demands for executive action, Carter abandoned his hands-off policy toward the biggest strike of his administration late Monday and summoned both parties to the White House immediately for what he called a "final opportunity" for bargaining.
He hinted that his next step might be to invoke injunctive powers of the Taft-Hartley Act to order the strikers back to work for 80 days.
The UMW's Miller accepted readily, but no word was heard from the Bituminous Coal Operators Association, the industry bargaining arm, until yesterday morning, when it stunned and reportedly outraged the White House with a blistering rejection.
Noting acerbically that BCOA had to learn of Carter's action "via television," E.B. Leisenring Jr., chairman of BCOA and president of the Westmoreland Coal Co., told Labor Secretary Ray Marshall that it was "obliged to decline the request" and stick by its previous demand that the bargaining council reconsider.
"The country should not be held hostage to any group which seizes the energy jugular," Leisenring said. 'It would be a mistake to facilitate over-reaching by encouraging another round of bargaining."
Leisenring said 'collective bargaining has worked" out the union's internal processes have failed and the administration should summon the failing members - the UMW's national officers and bargaining council - to the White House. The union must get its house in order," he said.
Marshall promptly went to the White House, where efforts were under way to lobby Congress, the business community and public opinion to put pressure on BCOA to reconsier.
During the morning Marshall reportedly sent out appeals to U.S. Steel and other other power centers within BCOA, an association of 130 mining companies.
Among these companies are so-called captive-mines owned by the steel industry, which consumes about 15 per cent of all coal. U.S. Steel and Bethlehem are among the most powerful voices in the association, which also includes several large independent mining companies as well as mining interests of large conglomerates, oil companies and some utilities. Electric utilities consume 75 per cent of all coal mined in the country.
As Carter conferred with aides over what was described as a "tough" statement criticizing the industry's action, Carter asked to see Marshall, who told him that Miller just called to say he was willing to expand the union's bargaining team. Marshall had suggested this course, which the council had been demanding of Miller, in a meeting with the union leader Monday night, but had gotten no response.
According to administration officials, Marshall suggested floating the union concession past the BCOA, predicting that it would do the trick. Marshall then called J. Bruce Johnston, U.S. Steel's chief labor negotiator, and an agreement to resume the talks was reached in about 10 minutes, aides said.
Officials contended that some coal operators had almost immediate second thoughts about the rejection and began calling the White House to say no. Other sources said there was substantial concern over public reaction to definance of a presidential request simply to talk, especially in light of the escalating energy shortages. Until yesterday, most criticism had centred on the union bargaining council's rejection of the settlement and filler's faltering leadership.
The BCOA said only that "appropriate conditions" had been agreed upon, including expansion of the union negotiating team and assurances that the earlier settlement would not be totally abandoned.
The bargaining council, in rejcting the settlement Sunday by a 30-to-6 vote over Miller's objections, had told the negotiators to start all over in writing a contract. Administration officials said no firm agreement was reached on this point, but noted that time constraints rule out starting from scratch.
Administration sources indicated that they expected that expansion of the six-member UMW negotiating team - to include three bargaining council members who voted to reject the earlier proposal - would assure approval of a new offer. The new members are Jack Perry of District 17 in Charleston, W.Va., Kenneth Dawson of District 12 in Illinois and Tommy Gaston of District 23 in Kentucky.
Approval of the 39-member council, composed of the union's top national and regional officials, is needed before a contract can be submitted to rank-and-file members for ratification.
The rejected contract would have increased miners' compensation by nearly 37 per cent over three years, the largest industrial settlement in at least two years. It also would have guaranteed payment of medical and pension benefits, which were drained by recent wildcat strikes and have been terminated.
But the bargaining council balked at proposed fines and other disciplinary measures to end wildcat strikes, loss of automatic cost-of-living increases, company takeover of medical and pension systems now administered by independent trustees and miner-paid deductibles for health care that was previously free (although intermittent because of wildcat strikes and other problems.)
The White House announced last night that Carter has invited the governors of 12 states to meet with him this afternoon to discuss steps that can be taken to ease the impact of the strike. Press Secretary Jody Powell said that among the topics to be discussed at the meeting are the transfer of coal and power among states, law enforcement problems and steps to ensure "equity among the various states" now competing for dwindling coal supplies.
Powell said the governors of Illinois, Indiana, Ohio, Michigan, Missouri, Kentucky, West Virginia, Virginia, Pennsylvania, Tennessee, Maryland and Wisconsin have been invited to the meeting, and most are expected to attend.
He said these states are the hardest hit by the strike or may be in a position to aid a neighboring state that is suffering from the strike.