NOT ALL ELECTIONS that matter are for political office or are held on the first Tuesday after the first Monday in November. We are reminded of that by the first returns on ratification of the contract that United Auto Workers leaders negotiated with the Chrysler Corp. In those first returns, the contract is being voted down by a 2-to-1 margin. Those votes may have been cast in unrepresentative locals -- there are often vast differences between different union locals in such ratification elections--and the contract may ultimately be approved, or disapproved, by a much closer margin. But if the first trends hold up, the consequences, not just for Chrysler or the UAW, will be serious.
In fact, earlier and more generous UAW contracts with General Motors and Ford were ratified by only narrow margins. This despite the fact that UAW negotiators, led by outgoing president Douglas Fraser, are highly skilled, and despite the fact that the auto industry's troubles are obvious. Every auto worker knows that 300,000 of his counterparts have been laid off in the last two years. Auto workers know that auto sales are not rebounding. They have every reason to know that the survival of Chrysler is by no means a sure thing, and that Ford is threatened, and that even GM is in financial trouble.
Yet the first sign of good news -- the announcement by Chrysler boss Lee Iacocca that Chrysler made a profit and has some cash in the till--seems to trigger, for some workers at least, old habits of demanding generous settlements. Americans seem to have the idea that they are entitled by some kind of natural law to keep up with inflation, and a little more every year, regardless of the state of the economy or the productivity of their labor. That attitude is one of the reasons for the persistent inflationary bias in our economy over the last 10 years. Three years without economic growth, even the collapse of a major industry like autos, do not seem to be enough to eradicate those attitudes if the first returns from Chrysler are an accurate forecast of the outcome. The Chrysler contract if rejected can be renegotiated without major harm to the economy, but the attitudes that a rejection would indicate have the potential to cause harm for years to come.