Negotiations with bus and subway workers that could result in either a crippling strike or new damage to the city's financial future entered the final hours before a strike deadline last night.
Leaders of the 33,000 transportation workers stuck to their "no contract, no work" pledge and make arrangements for an orderly shutdown of the transit system when their contract expires at midnight should there be no new agreement.
A separate strike by brakemen and conductors on the heavily traveled Long Island Rail Road was averted when a contract agreement was reached yesterday afternoon about seven hour before the strike deadline.
A shutdown of the bus and subways that carry 4.5 billion passengers each weekday would have disastrous consequences for commerce. Businesses were desperately arranging for fleets of private buses, car pools, helicopters, bicycles and boats to move their employes next week in the event of a strike.
Watching over the Metropolitan Transportation Authority's shoulder as it negotiated with the Transport Workers Union wer Mayor Edward Kock and Gov. Hugh Carey, who will have to bless any new contract.
Leaning over their shoulders are those members of the administration and Congress who will decide how much federal aid New York receives for next year. Chief among them is Sen. William Proxmire (D-Wis./, which must approve a renewal of federal loans.
In his latest comment, Proxmire, urged Koch to "stand tough." A tough stand with the workers would demonstrate fiscal responsibility and enhance the city's chances for new aid from Washington, which considers New York's past labor policies profligate.
Interlocked with the transit negotiations are the talks between the city and a coalition of municipal unions that will demand increases at least equal to the transit workers' when their contracts expire June 30.
According to government figures, each 1 percent increase for the $33,000 bus and subway workers would cost the transportation authority, a state agency, $8.1 million. Each 1 percent raise for the 200,000 municipal workers would cost the nearly bankrupt city about $40 million.
Balanced against the Koch and Carey fears of inflating payrolls and angering Washington are memories of a 12-day transti strike in 1966 that crippled the city and permanently damaged the career of Mayor John Lindsay.
Record traffic jams, millions in lost business and paychecks, and sore feet marked that disaster, which happened in January, not in pleasant early spring.
Three methods of raising money to pay higher wages were available when the transit talks started:
Increasing the 50 cent fare was rejected by the transportation authority as unacceptable. Carey is running for reelection this year. That is not to say that the fare will not rise next year and thereby additional revenues.
Increasing federal, state or city subsidies has been discussed during the negotiations, and Carey came through with a new $100 million in state funds this week.
The third method - "give-backs" of union benefits, or productivity increases at the expense of union benefits - has been resisted by the union, and became the key test of each side's toughness in the Hilton Hotel bargaining.
The union is demanding an unspecified wage increase. Leaders said there members need a 17.8 percent increase to restore their 1974 purchasing power. The average bus and subway worker earns $13,733 plus a $3,359 in overtime annually.
one of the elements in Democrat Koch's successful mayoral campaign was his promise to get tough with the unions. Most union leaders supported the incumbent, Democrat Abraham Beame, who was described as the only candidate who could keep labor peace in New York.
However, the municipal unions have become heavy investors in the city's future. Despite their members' desires for new benefits, they cannot be indifferent to the financial reputation of New York which is entwined with the financial safety of their pension funds.
A result of their purchases as to assist the city during its acute fiscal crisis, almost 35 percent of the unions' funds are invested in city notes and bonds.
As the deadline neared, Koch announced emergency traffic regulations to take effect during a strike. These would:
Prohibit private cars with fewer than two occupants from entering Manhattan south of 96th Street from 6 to 10 a.m.
Ban private cars with fewer than four occupants from seven of the main commuter artieries into Manhattan during the same hours.
Ban all private cars from sections of Fifth Avenue and Broadway which will be emergency corridors.
Permit group riding in taxis.
Manhattan hotel rooms, rental bicycles and mopeds were in strong demand from New Yorkers seeking to prepare for the worst.
A group of major banks rented five 600-passenger boats to ferry employes from Brooklyn and Queens to the Wall Street area.
New York Telephone Co. planned to run a fleet of some 600 buses around the clock to transport about 40,000 workers. It called its contingency plan the Mechanized Emergency Transportation System (METS).