The United Auto Workers declares that it will not accept a three- year wage freze at Chrysler, even as a condition for the federal rescue of the company. It is right. A wage freeze would have a crippling effect on the company. It would mean that, toward the end of the period, Chrysler's employees would be making perhaps one-fourth less than people doing the same work, with a much better prospect of future security, at the other automobile companies. Many employees -- among the most skilled productive and mobile -- would depart. That could only diminish further the company's chance of survival.
Bailing out Chrysler sets a bad precedent, and Congress shouldn't do it. But if Congress goes ahead with the rescue, it has an obligation to both the company and the taxpayers to drop the kind of hampering political conditions that the House and Senate committees have been enthusiastically stitching into it. One good reason for oposing the ball-out (there are more than one) is the fear of creating an industrial invalid that would require continual transfusions of public aid. A wage freeze would make that prospect self-fulfilling.
Chrysler argues that if it can stay in business until next fall, its position will improve sudenly and sharply. The new models going into production then, the company says, will be attractive, lighter than most of their competitors, and very high in fuel mileage. As for labor costs, the company's new contract with the UAW defers wage increases for two years and returns to parity with the other manufacturers in the third year, when, Chrysler calculates, it should by earning a profit again. A two-year deferral is enough to expect from the work force in a time of high inflation.
If Congress decides to enact this bill -- and the decision will have to be made within the next several weeks -- it should at least impose two rules on itself. It should cross out any amendments that would damage the competitive efficiency of the company. Along with the requirement of substandard wages, that means dropping the attempt to use Chrysler as a guinea pig for Sen. Russell Long's theories about employee stock options. It also means dropping the misguided language in the House bill that would try to keep Chrysler's oldest and most obsolete plants in operation.
Beyond that, if Congress proceeds with this dubious experiment, it should make it explicit that federal aid would be extended only once. Chrysler says that the present crisis is unique, will last only a few months and will not recur. Congress would do well to take the company at its word. To forbid any renewals or extensions would at least acknowledge the concern that Congress might be establishing a permanent welfare case of a very expensive kind.