Negotiators for the oil industry and unionized refinery workers are lining up on opposing sides of President Carter's 7 percent wage increase guidelines in a significant, if largely symbolic, first test of the administration's pay-restraint program.
The showdown is scheduled to come by midnight Sunday, when more than 400 contracts covering 60,000 refinery and other oil workers expire, raising the likelihood of a strike if no settlements are within reach by then. A strike, however, would have little immediate effect.
As of today, at least 13 companies, including Gulf, Mobil, Texaco, Shell and most of the other oil giants, have offered money packages that fall within the administration's 7 percent anti-inflation guideline for wage and benefit increases this year. Most have offered pay incrases of 7 percent for 1979 and 6 percent for 1980, of 13 percent over the two-year life of the contract.
All have been rejected by the Oil, Chemical and Atomic Workers (OCAW) as failing to meet the union's demand for a substantial increase in wages and fringe benefits, including company assumption of all health insurance costs.
The OCAW has not said what "substantial" is, but has made it clear that 7 percent doesn't fit the definition. Two years ago it settled for annual wage increases of roughly 9 percent.
Compared with truckiing, autos and other industries that will be going to the bargaining table this year, labor costs are a relatively small component of prices in the highly automated oil industry -- amounting to 88/100ths of a cent in the price of gasoline, according to OCAW President A. F. Grospiron.
"We would have to double our wages -- an unlikely event -- to add less than 1 cent to the price of a gallon of gasoline," said Grospiron recently, in asserting the union's opposition to the administration's wage-price guidelines and its intention to bargain without regard to them.
Moreover, the oil industry normally doesn't set wage patterns for bigger unions, such as the Teamsters, whose master freight agreement covering 300,000 truck drivers expires March 31.
But, even if an expensive oil settlement would not set a bargaining pattern or contribute to inflation, the 411 separate sets of negotiations that are being coordinated out of the OCAW's headquarters here this week are being watched closely in Washington. They lead off the 1979 bargaining calendar, and thus provide the first test of the 3-month-old guidelines -- even if only a symbolic one.
The OCAW settlement "may be only as important as the media make it out to be," said one administration official. "It's only as important as we make it," said another. It's significant but not crucial, said a third.
High-ranking administration officials, including Energy Secretary James R. Schlesinger Jr., Labor Secretary Ray Marshall and presidential inflation adviser Alfred Kahn, have met separately with industry and union officials to urge wage restraint. But they have avoided singling out the oil industry talks as a make-or-break test for the guidelines.
This puts the administration in a position to tout a settlement of roughly 7 percent as a victory for the program, strengthening its hand for future negotiations, or to shrug off a guidelines-busting wage agreement as relatively unimportant.
A strike is considered possible, even probable, by some government, industry and union officials, but this is causing no panic. "There is a feeling that the only way to get a settlement close to the guidelines is to have a strike, and that the country can absorb a 100-day strike without impace," said an administration source.
This is because the nation's oil refineries are so extensively automated that they can be operated by supervisory employes for months, barring major breakdowns. According to the National Petroleum Refiners Association, some refineries have operated at least six months with only supervisory personnel on hand.
A strike of several weeks in 1969, the last industry wide walkout by the OCAW, resulted in little interruption in basic petroleum output, although there were some spot shortages, especially among speciality products, such as lubricants.
However, OCAW spokesman Jerry Archuleta said some companies have already developed strike contingency plans envisioning the closing of some plants to maximize the effective use of supervisory personnel.
"We know the industry is highly automated," said Archuleta, "but if they didn't need the 60,000 workers they wouldn't be there... the companies don't pay them just to be charitable."
An industry official suggested that "the crunch may come in the degree to which the Teamsters support an OCAW strike" by refusing to make truck deliveries from pipelines to consumers.
Another imponderable is the Iranian oilfield shutdown impace on demand for domestic oil, now being produced at near-capacity levels. Separately each problem is solvable, but together they could become a real problem, said a major oil company spokesman.
Grospiron said yesterday: "We will try to settle without a strike, but we will strike in order to consummate an honorable settlement." He said the government would be responsible if a strike occurred.
With $4.5 billion in federal contracts, the oil industry appears vulnerable to government threats to bar contracts of more than $5 million to guideline violators, but other factors may be more important.
One industry official suggested that concern over public relations may be enough to keep the companies within the guidelines. "Oil companies have problems already," he said.
The oil companies did not make their first money offer until last week, and have not budged since, but three days remain until the contracts expire. A spokesman for Gulf Oil, the pattern-setter for negotiations in 1975 and 1977, made a point today of saying the guidelines are "open to interpretation."
The OCAW represents between three-fifths and two-thirds of all refinery workers. Its members are among the highest-paid industrial workers, averaging $8.82 an hour for straight time and $9.32 for premium work, according to union figures.