State of Business: What Walter Won

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The settlement that Walter Reuther was in the process of wresting from General Motors last week promised in many ways to be the best bargain for his United Auto Workers since World War II. By Reuther's own estimate, he won an average 12¢ hourly take-home raise and he drove much closer toward his goal of a guaranteed annual wage. Altogether, counting wage raises and new benefits, G.M.'s labor costs would go up an estimated 20¢ to 25¢ an hour in the first year of the contract. Reuther crowed that the deal was "noninflationary"—a claim strongly echoed by the Administration. G.M. made no such boast, but its captains told Labor Secretary Arthur Goldberg that 1962 auto prices would not go up.

The Cold-Shower Glow. General Motors gave Reuther pretty much the same beribboned package that he got two weeks earlier at American Motors Corp.—but without profit sharing. One reason for G.M.'s sudden retreat was that it wants nothing to block what it hopefully expects to be a banner selling year. Said American Motors Vice President Ed Cushman: "You should have seen Walter's eyes light up like a pinball machine when two G.M. vice presidents predicted a 7,250,000-car year for 1962. Walter knew he had power there."

More than that, Reuther knew that the Kennedy Administration was pressing for a quick settlement. On the strength of repeated hints dropped by Arthur Goldberg, Detroit became convinced that the Administration was prepared to take extraordinary action in case of an auto strike that might jeopardize the business recovery and the defense speedup. While General Motors figured it could economically risk a walkout, it also figured that to do so would only invite prompt government intervention that very likely would enforce the same kind of settlement that G.M. accepted voluntarily.

That feeling was strengthened early last week when, just 17 hours before the strike deadline, a personal telegram came in to both sides from President Kennedy, emphasizing "the high degree of responsibility you bear to the country . . ." In the final countdown, G.M. began to make one concession after another. After 17 solid hours of hard bargaining, Walter Reuther stepped out wearing a coldshower glow. "I feel very good," he beamed. "I'm delighted."

G.M. was less delighted. At week's end, wildcat strikes continued to flare up, and local contracts had been signed in only six of G.M.'s 129 plants. The odds were that many plants would be struck this week at least briefly, but most Detroiters were convinced that the "national economic agreement" between G.M. and the U.A.W. would soon be signed—and that Ford and Chrysler, in turn, would also buy it.