The United Auto Workers and General Motors Corp. yesterday broke off their unprecedented attempt to agree on a new contract providing lower labor costs and reduced car prices, negotiations that appear to be crucial to GM's recovery and future employment for thousands of union workers.
The UAW and GM could resume talks after a strategy meeting of the union's GM bargaining unit in Washington Saturday, although union spokesmen offered no grounds for optimism.
The apparent collapse of the talks comes at a time when two of the nation's other major unions, the Teamsters and the United Food and Commercial Workers International Union, have agreed to wage freezes throughout the life of new multiyear contracts in an effort to save union jobs in their industries.
Talks between the UAW and Ford have been recessed until the union's Ford bargaining council also meets in Washington Saturday. Ford has offered a contract proposal that is different in most key areas from the GM proposal.
Peter Pestillo, Ford vice president for labor relations, said that, despite the delay, the atmosphere is "positive. I fully expect that we can proceed." The UAW also said talks with Ford will resume soon.
GM officials, who have warned of further layoffs and plant closings if the negotiations end in failure, had no word yesterday on the company's next moves. The plants in greatest jeopardy are believed to be those that manufacture parts and components GM can obtain from outside suppliers in this country or overseas, where labor costs are lower. The UAW's determination to get firm limitations on the use of such outside suppliers reportedly was a central factor in the breakdown of negotiations in Detroit.
The other key issue was the size of the labor savings sought by GM. The company had agreed to the union's proposal to pass all labor cost savings on to consumers in the form of lower car prices, reversing the company's historic bargaining position.
GM indicated that it hoped to cut car prices by as much as $1,200, half of which would come from the union in non-wage concessions, principally cuts in paid personal holidays and changes in health and pension benefits, sources said.
GM had asked for a $5-an-hour reduction in non-wage compensation. UAW members at GM average $20.83 an hour in wage and fringe benefits.
"We're disappointed," UAW President Douglas A. Fraser said in Detroit at noon yesterday, after a night of lengthy talks with GM negotiators. "We wanted to work this agreement out. It's disappointing and regrettable."
Alfred S. Warren, GM's vice president for labor relations, also expressed regrets, but blamed the union for ending the negotiations, which began Jan. 10.
"We need to respond . . . very quickly," Warren said of slumping sales. "I don't think the industry can wait."
GM officials said yesterday that they would be willing to return to the bargaining table whenever the union wants to resume talks.
UAW spokesman Don Stillman said yesterday that it will be up to the 300-member GM council to decide Saturday whether to continue the emergency negotiation.
"We worked at it for 10 days, but just couldn't get to the point where we thought we could have adequate, meaningful job security provisions and agreement on other issues as well," he said.
Both the union and GM had set a Jan. 23 deadline for a tentative contract that could be presented to the GM council. Ford has a similar agreement on a deadline.
An end to the UAW-GM talks could doom what one source called the pioneering effort between the union and GM to return all labor costs savings to consumers, a long-time goal of the UAW.
Ford has not made such an agreement, and a UAW spokesman said the agreement would be erased if the current talks failed. The current UAW contracts with both Ford and GM expire Sept. 14.