Business: Scary Strike

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$9.62 an hour is not enough

Proudly, officers of United Auto Workers Local 2055 announced two weeks ago the completion of negotiation of a first contract for 1,800 members at Volkswagen's six-month-old plant in New Stanton, Pa. The pact called for a minimum wage next year of $7.48 an hour for unskilled workers, rising to $9.62 in 1981, and $9.48 for skilled diemakers, rising in three years to $11.62 — plus fringes. But the workers were not buying. Last week they rejected the contract 1,235 to 94 and stomped out on strike.

Until now, VW's Pennsylvania wage has averaged more than a dollar less than what Detroit's Big Three pay, and VW workers insist on catching up. In sum, the VW workers want at least $10 an hour by 1981. The walkout is the latest sign that labor leaders' clout with their membership is waning — an ominous portent for next year's heavy calendar of union bargaining. The VW strike is also unsettling other foreign firms that are thinking of starting plants in the U.S., notably Japan's automaking Toyota, Nissan (Datsun) and Honda. Says one Japanese automan: "If U.S. workers ask to get even with General Motors and Ford right away, I'm afraid no company will come here."