Business: Old Hand at Work

C.I.O. Boss Walter Reuther is an old hand at an effective union trick: get concessions from one company, then use them as a weapon to get the same from a competitor. Last week, for the benefit of his autoworkers, the young master played the game to perfection. Having signed up General Motors for a liberal contract extension (TIME, June 1), Reuther sat down with Ford's Labor Relations Boss John S. Bugas and got still more. Bugas agreed to all G.M.'s concessions: 19¢ in temporary cost-of-living boosts made permanent, a 1¢ hourly hike in the annual productivity allowance, a 10¢ hourly pay boost for skilled workers. He also agreed to a boost in maximum pensions, a bargaining matter that Reuther had not been able to reopen in his G.M. negotiations. The boost: from $125 to $137.50 a month.

Chrysler was next on Reuther's list, and it promptly fell in line with Ford. Then Reuther went back to G.M. and persuaded it to grant the pension increase. He had another gain, achieved just in the nick of time. The autoworkers cost-of-living increases (or decreases) were switched from the old to the new cost-of-living index. Last week, the new index, which comprises more items, edged a fraction lower, while the old index dropped 1.1%—enough to have caused a 2¢ hourly wage cut under the autoworkers' old contract.

Pessimistic View. The quick agreements in the auto industry were measures of the automen's good profits and confidence in the future. A month ago Reuther wrote the top automakers complaining that auto output was too high and should be eased to avoid "mass layoffs" in the second half of the year. But last week G.M.'s President Harlow Curtice answered Reuther with an optimistic letter: "I do not share [your] pessimistic view .. . We expect that employment in our various plants will continue at approximately current levels throughout the . . . year."

The first effects of Reuther's new auto agreements were felt by International Harvester's President John L. McCaffrey, whose employees still have their wages tied to the old cost-of-living index. McCaffrey had the misfortune to announce a 2¢-an-hour cost-of-living cut for his 75,000 employees just after the autoworkers got their raise. The Farm Equipment-United Electrical union warned that when it starts discussing contract changes with Harvester next fortnight, "we will definitely be talking about the automotive pattern." Answered McCaffrey, whose company has been hit by slipping farm income and a drop in implement sales: "We don't believe that just because some large company in another and much more profitable industry agrees to something, we are obligated to agree to it also."