One Down, Tougher One to Go

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Nothing like it had ever happened in the long history of auto negotiations. The contract between Ford and the United Auto Workers expired last Monday at midnight, and the company's 104,000 union members would ordinarily have gone out on strike. But the clock was stopped, and the two sides, tantalizingly close to an agreement, went on talking. Finally, after a 28-hour marathon bargaining session that ended about 60 hours beyond the original strike deadline, settlement came on Thursday morning. U.A.W. President Owen Bieber was not around for the handshakes; the strain of the negotiations had sent him to a Detroit hospital on Tuesday night with stomach pains. But he kept in touch with the talks by phone, and his deputy, U.A.W. Vice President Stephen Yokich, proclaimed the union's view of the outcome. "We have a good agreement," he said. "Truly, we broke a lot of new ground."

The proposed three-year contract contains job-security provisions that will give workers unprecedented protection against layoffs. The pact, which is expected to be handily ratified by the U.A.W. rank and file, also includes improved pension and health benefits, along with a first-year 3% wage hike. (The base pay of the average Ford union worker is now $13.42 an hour.) In the second and third years of the contract, the employees would receive 3% bonus payments.

Ford was in a position to be generous. Its 1986 profits ($3.3 billion on sales of $63 billion) surpassed General Motors' earnings ($2.9 billion from sales of $103 billion) for the first time since 1924. Said Ford President Harold Poling, who took part in the negotiations: "We believe we can live quite well with this agreement."

But struggling GM probably cannot. Bieber, who was released from the hospital late in the week, will demand from GM a deal similar to the Ford package in negotiations that begin this week. GM's contract with the U.A.W. also expired last week, but the union shrewdly decided to settle first with cash-rich Ford.

While No. 3 Chrysler does not face negotiations with its U.S. workers until next year, the company got a scare last week when its contract with the Canadian Auto Workers union ran out. Some 10,000 employees in Chrysler's four plants in Ontario went on strike, stopping production of such hot-selling models as the Dodge Caravan and Plymouth Voyager vans. The impact rippled across the border, idling 1,400 workers at Chrysler's plant in Belvidere, Ill., where most production was shut down for lack of Canadian-made parts, and 500 additional employees at a stamping plant operated by the firm in Warren, Mich. The Canadian union ended its walkout after four days, when Chrysler agreed to index the pensions of future retirees to inflation, up to an annual rate of 6%. The top rate will be 5% for current pensioners. Union leaders hope that the provision will encourage older workers to retire, helping preserve the jobs of younger workers.