Negotiators for the trucking industry and the striking Teamsters union reached tentative agreement last night on a new three-year contract that industry sources claimed was within President Carter's anti-inflation wage guideline.
The agreement, which is subject to ratification over the next month by 300,000 Teamster truck drivers and warehouse workers, is expected to end the 10-day industry work stoppage within the next 24 hours.
J. Curtis Counts, the president of Trucking Management Inc. (TMI) and the chief industry negotiator, told reporters at a joint news conference here shortly before midnight that the real cost of wages, benefits and cost-of-living adjustments in the new contract will exceed 30 percentt over three years, assuming an 8 1/2 percent inflation rate.
But he said he understood that, excluding various costs exempted from the guidelines, the pact would fall within the twice-relaxed wage guideline of 7 percent a year, or 22 1/2 percent compounded over three years.
The administration had made the Teamsters negotiations a major test of its voluntary anti-inflation effort and can be expected to claim the agreement as a victory. Officials said earlier yesterday that they anticipated an agreement that would be within the guidelines.
Teamsters President Frank Fitsimmons said he was "very happy" with the agreement and would "very definitely" recommend its ratification. As for whether it met the inflation fighter's guidelines, he said. "I can't figure their arithmetic."
In announcing the agreement, which was reached after two days of marathon bargaining following a deadlock last week, chief federal mediator Wayne L. Horvitz said machinery was being put in motion for an end to the combined strike-lockout within 24 hours. Industry sources said they expected the work stoppage to end by tomorrow.
The Teamsters' selective strike and the industry's retaliatory lockout-the longest and most extensive in the industry's history-hit the auto industry hard but left the rest of the economy relatively unaffected.
Although neither Horvitz nor the two chief bargainers would discuss details of the money package, it reportedly included wage increases of $1.50 an hour over three years on top of a wage base of nearly $10 hourly, plus 75 cents more an hour in health, welfare and pension benefits, and a contribution of cost-of-living increases contained in the previous contract.
The key issue separating the two sides when the strike began-roughly 25 cents an hour in extra cost-of-living money that would result from a union demand for semiannual rather than annual payments-was resolved by a compromise. The compromise apparently enables the contract to slide in under the wage ceiling.
Horvitz, who personally shepherded the negotiations from impasse to settlement, praised both sides for an "enormously cooperative effort" in the face of "enormous pressures from inside and outside"-an apparent reference to White House efforts to keep the settlement within the guidelines.
While the contract must be ratified by a majority vote of the union members, it is not expected to encounter serious difficulties Union aides said the process could take as long as four to six weeks. serious difficulties Union aides said the process could take as long as four to six weeks.
From the start, the aldministration's 7 percent wage guideline was a thorny centerpiece at the bargaining table, with the White House pressing hard for compliance and Fitzsimmons balking but indicating the union might be able to go along if certain changes were made.
Even before the talks began, anti-inflation officials agreed not to count, for guideline purposes, the cost of maintaining some existing benefits and complying with new pension laws-a costly item for the Teamsters' troubled pension funds.
Then, as the pressure built for a settlement, the government gave a little more: 21 cents of the 58 cents an hour in retroactive cost-of-living adjustments that the Teamsters expected to be paid at the start of the new contract. After first refusing to give on any of the 58 cents, officials agreed to discount everything over its mythical 6 percent inflation rate, or 21 cents.
Together, officials say, there "interpretations" add up to 3 to 4 percent on top of the compounded guideline of 22.5 percent over three years.
Together with soaring inflation rates, high corporate profits and congressional shelving of the administration's proposed "real wage insurace" for rewarding workers who comply with the wage standard, critics said the concessions had badly strained the whole wage-restraint effort.
The administration look a rosier view, publicly at least, insisting that the guidelines were alive and well for upcoming showdowns with unions representing rubber, electrical and auto workers. Officials noted that the settlement, however calculated, would be well below the 35-plus percent cost increase of the three-year contract that just expired.
The government's weapon in enforcing the "voluntary" guideline was the rate-setting power of the Interstate Commerce Commission over the highly regulated trucking industry.And the ICC indicated early in the game that it would not allow automatic pass-through to consumers, through higher trucking rates, of labor costs that exceed the pay guideline. Hence the unionized sector of the industry, which faces stiff competition from non-Teamsters operators and includes many financially shaky firms, held frim to the guidelines.
When the old contract expired at midnight March 31 and the Teamsters called their selective strikes, the two sides were said to be only 25 cents an hour apart: the cost of going fromannual to semiannual payment of cost-of-living money, meaning an extra 6 months' worth of compensation in the 1979-82 contract.
A contract that retained annual payments would have been within the guidelines, although it would end up costing more than 30 percent over three years, assuming an 8 1/2 percent inflation rate, the industry contended. The Teamsters' Fitzsimmons argued that the 25 cents could be accommodated within the guidelines, but the government said this would push the settlement about 2 percentage points beyond the ceiling.
The Teamsters' resort to a selective strike aimed at 73 companies came as no surprise, since targeted stoppages would have enabled the union to argue before an injunction-minded judge that the strike did not constitute a national emergency. It also put pressure on vulnerable companies to settle quickly. TMI, its predecessor groups having been picked apart by the Teamsters before, responded with a "defensive shutdown" of nearly all its 500 member companies, which TMI says handle more than 80 percent of unionized interstate truck traffic.
Within three days, the work stoppage became the longest and most extensive trucking shutdown in the 15-year history of the master freight agreement. But its impact-outside of the almost instantaneous wind-down of the auto industry, heavily dependent on trucks for auto parts-was minimal.
Crucial commodities such as food, fuel and health-related supplies continued to roll. As of last Friday, the Commerce Department said in a report yesterday, "food stores reported almost no differences between their current supply of major categories and the supply normally held."
Other government sources indicated it would have been the end of this week, at the earliest, before shortages became critical enough to warrant preparing affidavits for a Taft-Hartley 80-day cooling-off period, which specifies that the national health or safety must be imperiled before an injunction can be granted.