A senior anti-inflation official said yesterday that B.F. Goodrich's proposed pattern contract for the rubber industry probably violates the administration's wage guidelines, even in their most relaxed form.
The Carter administration assessment came as a second rubber company-strike bound Uniroyal Inc-agreed to an even bigger wage settlement.
Based on preliminary analysis, even controversial exemptions granted earlier this spring to squeeze the Teamster's contract into the guidelines will not be liberal enough to accommodate the goodrich settlement, the administration source said.
"From what we've seen, they [Goodrich] are out of compliance," the official said. "The question is by how much."
United Rubber Workers union sources estimate the cost of the tentative Goodrich pact as 42 percent over three years, assuming cost-of-living increases pegged to an annual inflation rate of 10 percent. The government estimates the outer limit of the costs at 35 percent.
The administration's standard for wage and benefit increases is 7 percent a year, or 22.5 percent compounded over three years. But this has turned out to be a norminal limit because of liberal exemptions and artificially low cost-of-living calculations.
Including all exemptions and calculating inflation at 6 percent, rather than at its current double-digit annual level, the Goodrich settlement appears to be about 26 percent "inguideline terms," the administration source said. By contrast, the Teamster settlement came in just under the wire, at 22.5 percent.
URW officials said the Uniroyal settlement is somewhat higher, including 5 cents and hour more in wages.
But the Uniroyal agreement was costly in more than just money terms.
As part of the price for ending the United Rubber Workers' 5 1/2 week strike against 11 of its plants, the company formally apologized for backing off an earlier accord that, until yesterday, it denied it ever made.
Uniroyal had repeatedly denied URW President Peter Bommarito's claim that the company made a tentative agreement April 18 and then rendged on it under pressure from White House anti-inflation officials.
"It is evident that both sides understood that a tentative agreement was reached on April 18," Uniroyal said yesterday. "The company regrets the misunderstanding and confusion that subsequently arose. Mr. Bommarito and his policy committee have our apologies for this unfortunate misunderstanding, which was not their fault at all."
With the tentative contract and the apology in hand, Bommarito said he was asking the 8,300 striking Uniroyal workers to return to their jobs today.
At a meeting yesterday in Akron, Ohio, the union's bargaining policy committee approved the Goodrich pact, which was negotiated last week in Washington, as the pattern for bargaining with the rest of the rubber industry.
The main holdout now is Goodyear Tire and Rubber Co., the largest of the "big four" rubber companies and reputedly a tough bargainer. Firestone, the second largest, previously agreed to go along with the industry pattern, whatever it turned out to be.
Bommarito, in a telephone interview, said he anticipates no problems either with the Goodyear negotiations or with rank-and-file worker ratification of the proposed settlements at each of the companies. Ratification votes are expected in a week or 10 days.
The tentative Goodrich contract calls for increases of 72 cents over three years on top of a current hourly wage base of about $8. The union had been seeking $1.14 an hour over three years and claimed to have won it in the initial Uniroyal agreement.
Also provided were more cost-of-living increases and a hands-off policy by the company in union organizing drives at its tire plants. Goodrich's existing tire plants are already totally unionized, but other companies have some nonunion tire operations.
This so-called "neutrality" pledge could be a problem in acceptance of the Goodrich pattern by Goodyear, which has major nonunion tire operations, some industry sources have suggested.
The improvement in the cost-of-living formula, aimed at recovering 100 percent instead of 85 percent of wages lost to inflation, is also expected to increase pressure on th United Auto Workers to win a similar gain in their negotiations with the "big three" auto companies this summer.
Even if the government's Council on Wage and Price Stability finds that the rubber contracts violate the guidelines, it is not clear what it can do. One official indicated the council would withhold action until the U.S. Court of Appeals rules on whether the government can legally deny federal contracts to guideline violators. A lower court has ruled that it cannot.
Peter J. Pestillo, Goodrich's chief negotiator, said Friday he thought the contract might comply with the guidelines under a liberal interpretation of exemptions. But yesterday's preliminary response indecated this is unlikely.