The Carter administration claimed the new Teamster contract as a victory for its 7 percent guideline for annual pay increases yesterday despite union and management agreement that the tentative pact would boost costs by at least 30 percent over the next three years.
The administration's victory proclamation also was clouded by a belated disclosure that the twice-revised pay standard had been stretched a third time-just enough, as it turned out, to accommodate a guideline-conforming settlement.
The tentative new contract, negotiated late Tuesday and subject to rank and file ratification later this month,anticipates a quick end to the 11-day combined strike-lokcnticipates a quick end to the 11-day combined strike-lockout, the longest nationwide work stoppage in the industry's history.
Union and industry negotiators hammered out a back-to-work agreement yesterday, meaning trucks are expected to start rolling again immediately.
The Teamster contract, involving 300,000 members of the nation's largest union, was a critical test of whether the administration's voluntary anti-inflation program would survive for future negotiation rounds with other powerful unions representing more than 1 million rubber, electrical and auto workers.
By use of some creative arithmetic, the administration was able to squeeze the contract into the guidelines, but only barely. And in the process of claiming victory, officials reportedly enraged Teamster president Frank Fitzsimmons and other union leaders who are concerned that such claims could jeopardise ratification prospects.
To start off the administration's upbeat assessment of the Teamster settlement, presidential anti-inflation adviser Alfred E. Kahn appeared at a White House press briefing and described the cost increase as "substantially less" than the increase embodied in the just expired contract, roughly 34 percent.
Kahn's remarks prompted a statement by Fitzsimmons that the contract is "about 30 percent higher than the contract we won three years ago" -more or less dovetailing an assessment made earlier by chief industry negotiator j.curtis counts that the cost increase exceeds 30 percent.
"It's as if he [kahn] is deliberately trying to sabotage ratification,"fumed Teamster spokesman Bernard Henderson. Henderson disputed Kahn's comparison between the two contracts and added: "That idiot out there is trying to shoot down our contract with his idiotic statements."
In calculating the prospective cost of wages, benefits and cost-of-living increases, Counts assumed an inflation rate of 8.5 percent, slightly less than it was over the last 12 months.Presumably, Fitzsimmons made the same assumption. The administration assumes 6 percent for its calculations.
On this basis, the government calculates the cost of the Teamster contract increase at 27 percent over three years. Allowing for at least three guideline exemptions, all made with the Teamster negotiations in mind, officials argue that the contract fits the wage guideline of 7 percent a year, or 22.5 percent compounded over three years.
In explaining the various exemptions, officials disclosed one that had not been apparent during the talks. The contract would exempt increased benefit costs for retirees.
This would add about 5 cents an hour to the Teamsters' hourly compensation base of $12.65 and about four-tenths of a percentage point to costs allowable under the guideline, officials said.
The officials, who asked not to be identified, said the guideline would have been exceeded if the extra 5 cents were counted but they denied that the concession was made simply to assure that compliance could be claimed. They said the discount was granted after inquiries were made from both sides in the bargaining about two weeks ago, well before the final outlines of the money settlement emerged. They rejected a reporter's suggestion that this amounts to "do-it-yourself guidelines making" and said they weren't certain how the exemption would apply to other negotiations.
Officials cited the rationale that benefit increases for retirees should be excluded from the guidelines if pensioners are excluded from voting on contract ratification. They are excluded both for the Teamsters and the United Auto Workers, who are expected to demand similar treatment on this point - a big cost item for the benefit-rich UAW - in Big Three auto negotiations this summer.
Officials conceded Teamster cost increases could reach as high as 31 1/2 percent if inflation averages 8.5 percent over the next three years, but said they consider this unlikely.
The last major obstacle to a settlement - a 25-cents-an-hour inflation catch-up windfall that Teamsters would receive by going to semiannual rather than annual payment of cost-of-living increases - was resolved simply by postponing the last payment until after the contract expires. Consequently, it does not count against the guidelines.
Under the proposed contract, workers will receive wage increases of $1.50 an hour (80 cents the first year and 35 cents in each of the next two years), benefit increases amounting to 75 cents an hour and cost-of-living increases that recover about 60 percent of lost buying power. They now average $12.65 an hour in wages and benefits, roughly $20,000 a year in wages alone.
In his statement, Kahn said President Carter welcomed the settlement and added: "I commend the parties for the responsibility they have shown in making a very important contribution to controlling inflation."
Although ratification appeared highly likely after Fitzsimmons strongly endorsed the contract, both industry and union sources expressed fear yesterday that Kahn's comments-especially his claim that the contract gains were "substantially less" than before-could be used to defeat the proposed settlement. Although it takes a two-thirds vote to reject a Teamster contract when no strike is called, only a simple majority is required after a strike.
After the old contract expired March 31, the strike was called in selective fashion against 73 firms, but the industry retaliated with a shutdown of 50 firms, crippling the auto industry but creating little impact on the rest of the economy. The only previous nationwide shutdown lasted three days in 1976.