The end of World War II rekindled a different kind of battle - one between automakers and the UAW. During the war, the War Labor Board controlled wages and prices and advocated expansion of unionism. In return, organized labor gave a no-strike pledge. Employers welcomed stable labor relations because it meant continued productivity.
The postwar period produced many significant changes in automaker-UAW relationships. The first wage negotiations resulted in a bitter 113-day strike at General Motors in 1945-46. Shortly thereafter, Walter Reuther consolidated his power within the UAW, when his allies won a majority of seats on the UAW board at the 1947 annual convention and he was re-elected president after his first one-year term.
Those conditions helped foster one of the most significant labor developments in the auto industry: pattern bargaining. As practiced in the auto industry, the UAW selects a company as its strike target, and a contract is negotiated with that company. When that contract is signed, the UAW negotiates with the other automakers, using the target contract as the pattern.
The idea of pattern bargaining evolved in 1946 during negotiations between the steel industry and the United Steelworkers Union and between the auto industry and the UAW, says Harold Levinson, a retired University of Michigan labor economist and author of several books on this subject. Contract talks in both industries occurred almost simultaneously.
On March 13, 1946, United States Steel and the United Steelworkers agreed to an increase of 18.5 cents per hour for hourly workers. Two days later, the UAW and General Motors also agreed to 18.5 cents. That established a wage pattern that spread to other industrial unions, says Levinson.
The UAW contract pattern was followed by the rubber industry, some auto parts suppliers and even manufacturers of farm equipment, Levinson says.
'None of the original unions said, 'We're going to spread through the manufacturing sector of the economy,'*' says Levinson. 'But that's what happened.'
Pattern bargaining among the Big 3 didn't occur formally until September 1955, when for the first time all three contracts had the same expiration date, enabling the UAW to give equal consideration to each of the Big 3 as a potential strike target.
In January 1951, Ford reopened a two-year contract that had been signed in 1949. After the Korean conflict caused the consumer price index to increase sharply and GM wages to rise accordingly, the other companies faced serious unrest. As a result, Ford decided to renegotiate its contract with the same 1955 expiration date and the same wage provisions as GM's contract. So did Chrysler.
'If we were going to get stuck with what GM negotiated, we wanted to get in the same contract cycle,' says Malcolm Denise, retired Ford labor relations vice president (1969-75).
After a 104-day strike on wage and pension issues that ended in May 1950, Chrysler negotiated a three-year UAW contract with a May 27, 1953, termination date, says Irving Bluestone, who was a UAW vice president from 1972-80.
The UAW and Chrysler renegotiated wages and pensions in 1953 and changed the contract's expiration date to 1955, when GM's and Ford's contracts expired.
The auto industry's version of pattern bargaining reflected some cagey economic and strategic thinking by Reuther.
Says Sidney Fine, University of Michigan labor history professor: 'Walter Reuther was very anxious that there not be a strike at Ford or Chrysler while he was negotiating with General Motors in 1945.
'Pattern bargaining put pressure on one company, while giving the union dues from the other two companies.'
Bluestone says, 'What we tried to do is to take wages out of competition and level the playing field among the auto companies. You don't want competition to be based on who will pay the lowest wage.'
Adds Douglas Fraser, UAW president from 1977-83: 'We also felt that it made no sense for two auto workers from the same neighborhood employed by different companies but doing the same exact job to be paid differently. Some in the UAW thought we should shut down the whole industry. The union thought we should select one company, set the pattern, and the other two would follow. The object was to put pressure on the struck company by keeping the other two working and avoid a long strike.'
That strategy produced some predictable results, but others were unanticipated. 'If the target com-pany agreed to a provision, such as COLA, it made it very difficult for the other companies not to agree,' says Robert Stenberg, retired Ford corporate staff manager of equal employment opportunity planning.
Says Mark Kahn, a retired Wayne State University economics professor: 'In the face of good markets, which made the auto companies reluctant to take a strike, pattern bargaining gave the UAW a lot of leverage.'
Not every pattern was adopted by the other companies, recalls Bluestone. In 1961, the UAW selected American Motors as the strike target because it wanted profit-sharing and AMC Chairman George Romney was amenable.
'We worked out a profit-sharing agreement with Romney, but when we went to the other three companies, they flatly rejected profit-sharing,' says Bluestone. They adopted it in 1982.
bargaining also prompted cooperation among manufacturers.
'The manufacturers didn't trust each other or what they planned to do in negotiations,' Denise recalls. 'The only outfit that knew what was going on at all three companies was the UAW. That gave them an unfair advantage, because the UAW could tell us what GM had offered it, but we couldn't be sure we'd get a straight answer if we called GM to verify.'
The first cooperation involving the
Big 3 evolved from the responses to the UAW's guaranteed annual wage proposal in 1955, Denise says. GM countered with a proposal that the UAW rejected. The UAW then went to Ford, and when it received GM's exact proposal (given by GM to Ford) with Ford's name substituted for GM's, 'Walter Reuther hit the ceiling and threatened to strike,' says Denise.
'We went back to the drawing board and refined a supplemental unemployment benefits plan we'd been considering before receiving GM's proposal. The UAW agreed. Then they went to GM, which adopted the plan, substituting General Motors' name for Ford's name. That clearly demonstrated GM could not go its own way.'
Shortly thereafter, after consulting with antitrust specialists to determine the limits of a cooperative arrangement with GM and Chrysler in discussing labor issues, Ford instituted a team strike preparation approach that included formal joint study committees on UAW demands and regular meetings. 'First we initiated talks with General Motors and had an air-clearing session to settle perceived problems or slights,' says Denise. Then, in 1958, Chrysler joined in.
Pattern bargaining has had positive and negative effects on the U.S. economy. Because the UAW tended to introduce ideas into collective bargaining earlier than other unions, some benefits were incorporated into non-auto contracts earlier than would otherwise have been the case, says Fine.
But it may have produced greater inflationary pressure. Says Levinson, 'If you have widespread cost-of-living clauses in many industries and then inflationary pressures are initiated from some other source, such as a war (Vietnam) or other economic event (OPEC increases in oil prices), it creates an automatic feedback mechanism.'
It's doubtful whether automotive pattern bargaining will remain the wage-and-benefit bellwether, economists say. Production shifts abroad, softness in the economy and Chrysler's near-bankruptcies have weakened pattern bargaining.
'The union's ability to insist on the Big 3 pattern throughout the rest of the automotive industry has been weakened because of the introduction of foreign, nonunion competitors,' says Levinson.
Yet Kahn predicts the industry's increased prosperity may encourage the UAW to return to more aggressive, but less rigid, pattern-bargaining strategies.
Says Fraser: 'Some people would argue that because Caterpillar was able to resist the pattern' after a bitter 18-month strike in 1994-95, 'the UAW doesn't have the same type of leverage it once had.' But he disagrees that pattern bargaining is in decline.
'The UAW and the Big 3 are cooperating in a variety of areas,' he says. 'Hopefully, that will make bargaining smoother. Today, the Big 3 are economically healthy and the union can use pattern bargaining and strike, if necessary, with the same potency as in previous years.' *
Ann Therese Darin is a free-lance writer in Lake Forest, Ill.