In the power politics of this big industrial state, the Democratic Party and the United Auto Workers union are closely connected. The union provides footsoldiers and generals for the party, sets its agenda, makes and breaks candidates.

But today UAW president Douglas Fraser, the old liberal Democrat, in Congress with a confession to shake any good Democrat's soul.

"People of my generation have been running against Herbert Hoover ever snce 1932," he said at the end of a press conference. "And now in 1980 we find they [the Republicans] have the issues and we don't.

"As unemployment goes up, more and more working people will be casting their votes for Ronald Reagan," he declared a few minutes earlier. "There's an absolute correlation between high unemployment and the movement to Reagan."

Fraser wasn't endorsing Reagan or saying much good about any of the Republicans he met with except Rep. Margaret Heckler, whom the UAW has endorsed for reelection in Massachusetts.

But fraser, who has supported Sen. Edward M. Kennedy for the Democratic presidential nomination, went out of his way to point out the dramatic shift in attitudes that has taken place among his union members since a UAW survey last August found 62 percent considered themselves Democrats and only 9 percent Republicans. "Workers are going to vote for Reagan much more so than they would have six months ago," he said. "That may change. But they're moving in that direction."

Republicans, gathered here for next week's national convention, considered the breakfast a smashing success, a landmark in their efforts to broaden the party's appeal. "What Republicans are trying to say is we need and want you to help build a new coalition in American politics," said national chairman Bill Brock.

The party has undergone a major change, said Rep. Jack Kemp of New York, a possible Reagan vice presidential running mate. "We are now clearly the party of the American worker . . . the party of full employment."

"I'd say the Democratic Party has deserted the working men and women of this country," he added.

Fraser wasn't about to concede that. He and the Republicans were doing "a little sideways dance," he said.He noted that the typical GOP legislator at the breakfast had only a zero to 10 percent record of support for labor legislation, and "just last week" Sen. Bob Dole of Kansas "fought very hard" against extending emergency unemployment benefits to auto workers.

Reagan's record as governor "wasn't that bad" for labor, Fraser said. But he added that Reagan would never win the hearts of union leaders if he continues to make statements like his recent one in South Bend, Ind., where he suggested using the Sherman Antitrust Act to break up big unions.

Both the politicians and the union leaders described the breakfast meeting as fruitful, with most of the discussion focused on the problems of the auto industry.

Whatever else the breakfast did, it was a publicity coup for the Republicans on the eve of their convention. "I don't know what they think its worth was in propaganda," Fraser said. "If that was their motive, I guess we got sucked in."

But the meeting also had propaganda value for Fraser as he tries to attract increased attention from the Carter White House to the problems of his members.