The MacNeil/Lehrer Report

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station and more than two hundred sixty other public television stations nationwide and by grants from exxon corporation and at and t and the bowl system companies right right the peak week has been getting american airlines yesterday asked all its employees to accept a five percent pay cut for three months the airline was the latest in a growing list of us companies asking their employees for givebacks to relinquish pay or benefits agreed and contract by many as the effects of the recession deepened get back to become a burning issue in american industry and a source of agonizing reappraisal for labor unions some of the companies affected so far chrysler workers agreed to give up more than a billion dollars in wage and

benefits for those out workers at one plant to cut their pay and that general motors is reported to have begun a campaign to convince workers of hard realities that may be required for survival steel workers at the heiress news corp have given up cost of living adjustments for year firestone workers in memphis of given up weekend premium pay as they have of elsie io opens its convention here in new york where the first blast of reaganomics union leaders are wondering whether giveback concessions on a plant by plant bases may not destroy industry wide body tonight will labor accept more pay cuts to save jobs you run probably the most dramatic story concerning worker concessions is being played out now in sheffield alabama hall mobile ford motor company plant were aluminum parts for engines and transmissions are cast a plant that employs eleven hundred union workers that is operating at thirty five percent capacity and is currently losing three million dollars a month according to forbes last month ford major field workers and a modest proposal

take a fifty percent cut in wages and benefits beginning january first plus or dissipate and a profit sharing plan or by the plant operator cells otherwise the plan will be closed down beginning january first ford's vice president for labor relations peer still always in sheffield ten days ago and explain the company's position at a press conference my view of the value of each of the sheffield proposal first made them want to provide employees not to dissipate in a decision which is a colossally the scenario focus on one we were offering an effective tactic is still available through federal aid is much easier to walk away from plans they've done cause you know when we went out of the window of their dishes you have people for a while you were the position we think when to quit again and send their knowledge of our own ways of confirmed of our show

and the maybe read returning to profitability to do something that they helped the people i characterize your field your marriage when you interview officials at the national level well that exact in isolation anything get over it offers real presidential candidate from the standpoint of what we want to look different form of profit sharing the most entertaining chrysler file various concessions and the like and you interview has proved itself as a far greater ability to reject press the courts to make very clear we can't rule out further subsidize the second biggest opposition so the january one deadline it's clear that we'll begin our source but again it's a fairly good size by about easley one doesn't for one day and never return we indicated that we would begin outsourcing which suggest that the number of parts of autoworkers will be over save a six month period

i think going to give you fifteen months or thereabouts right to accomplish the closure but what is significant power and why gen one grows more critical extent to which we outsource is deported for the burden of a successor thus far the sheffield workers and the uaw have said no flagship ford also put ford is extended an initial deadline to next monday to see if something can still be worked out yesterday our reporter gordon earll was in sheffield and talked to sonny le canales president of the uaw local at the ford plant how do you describe the attitude towards taking a cut in pay for the union's position is somehow special we feel as a human being threatened her out before grabbing a wager trying to wedge us all on a national contract which with a crescent

city and of those people location across the nation there in some time so i wanted to open negotiations reopen the contract no no you know ortiz open to negotiations early on their own terms and if they're successful here probably something that second aisle and family are mourning council apply to negotiations will be cut to deal with the ford motor company you've been negotiating in good faith or do you think that they're looking towards closing the there's a strong possibility that the plant to close anyway year to the plant's almost twenty five years

old and on the plant it is and this is a fairly old plant is outdated fortuitous new facilities are located and i think for me just went for a couple years in this city aleppo have to be phased out and shut down what concerns me about two years now as well schumer forward and if that's the case in my view that so it had been with us which is very dark tale that there is definitely a trend for motown or these bars mexico and japan all cross the world how so indeed the attitude or the reflection workers

now and they're not buying that in el paso if there was ever a solidarity their solidarity now in the ranks of the very simple fact model for mccain is trying to impose this on the part of the armistice line out against all that they stand for and they obviously they believe the eight democrats and all this what do they descend back forty years of struggle that yogurt has gone through these wages well if i get half a loaf so much on the color turning themselves in half a lull along the government of the union address tomorrow the people would say that it's led prefer this one a date ford says unifil as an isolated case brought about by the special circumstances others say it is part of something much larger here to sort out that something larger is jerry flood washed

and bureau chief for forbes magazine author of an article on the subject in the magazine's current issue he's also a former reporter for the new york times in chief for the times detroit bureau how would you fit this sheffield situation into the general give that movement within the islanders sheffield of the extreme case but it's part of the broader movement the automobile makers particularly general motors and ford are telling their union we can't afford to pay eight to ten dollars more an hour that are japanese competition but we're not going to be in business in this country if that continues and their threat is very simple if we don't get some cooperation if we don't get something back then will step up the shift of parts of vehicle production abroad because we've got two to survive sheffield is extreme and that they're demanding let's say out fifty percent labor cost reduction and the threat is to close a plant in a short time but it's part of a broader movement

either give us something that we're going to be any jobs you've talked to the people on both sides of this people and management the auto companies and the uaw as well first the uaw what is how are they receiving this message in a general way you're in what mr mccann was just says no we were solid on this we're not going to get the uaw has crew problems first there is always a possibility they believe that it's a bargaining law that it's not really a trick that a technique to soften the union up so that one new contract negotiations begin next summer the unions won't a man mutter will be ready to give up things that they have another problem if it's true even if it's true how do you sell workers into giving up something for forty or fifty years the unions have said you have to give us more and it's our right and it's very

difficult in a political system and that's what the union is a political system to go out and tell the guy the fellas you got to give up some of your blue cross you got to give up nine paid days off that we got for you there's not going to be any pay raise this year we're not going to cover all of the cost of living increase very difficult for someone in the back or i'm always gets up and they'll sell while it's tough to do what is your all you could you follow that the sheffield case specifically idea think that thing's gonna bearers all watched specter of the year deadline you mentioned of november twenty third act can be expanded and probably will be if there's any sign of a gift from the union the company will probably expand that they're in no rush what they're concerned about is really the nineteen eighty four nineteen eighty eight five models have a little time there but that the union doesn't make concessions and i would sit here they're going to shut it down and it may be a period of two years in which that shutdown takes place but tom

i suspect they've shut down over one hundred job growth is it likely based on your experience that those eleven hundred members down in sheffield with the help of the way that we will never agree to a fifty percent cut in wages and benefit there's always something you can do you know maybe maybe not fifty maybe forty people on a work together that they can work out something ahmed is not a pound of flesh were dealing with other the case up in clark new jersey i'm not going to discuss it on your program similar case ball bearing plant general motors said sorry fellas we gotta close about other words more time there the workers got together they shifted a hundred dollars apiece they hired a consultant they said can we keep this thing going far they decided they could general motors said we'll give you the plant and will give you a contract to make sure there's plenty of work for you but we have to be because the men in the market directly to

take up of their own because now they are their own bosses more laughs and in addition they cut back the workforce a lot more an increase productivity that said frankly working for ourselves over jobs we can work a lot harder we're not fighting the varsity more wealth that may have saved over a thousand jobs and clark you can always do something if you want to but it's not that the tough political issue to the man for the rhyme and enough land has studied the impact of new technology on manufacturing particular the auto industry in the united states and abroad he's harley shaiken research associate at the massachusetts institute of technology i'm a consultant to the united auto workers and government agencies is to shake and that afforded fisher we just heard say this is an act and isolation is it i don't think so i think even more significantly roger smith of the chairman of the board of general motors doesn't think so i think he stated publicly that gm is looking at how ford

workers are reacting to these types of concessions of critically what's happening at sheffield from your knowledge of the auto industry aren't these requested givebacks necessary for the survival of the auto industry are they are bargaining ploy towards the ad to wage negotiations no i don't i definitely don't think they're necessary for the survival of the industry they happen to be a very effective short cut to profitability but they don't deal with the long term issues of an economy in trouble today on the end of an industry that's made some very poor manufacturing marketing decisions in the past for example in terms of the economy seventy five percent of automobiles are purchased on credit all of the interest rate can be lowered the companies are seeking to take that out of our own work force in terms of the marketing decisions manufacturing decisions in the past august more to a competitive company the labor costs let's look at the case of chrysler it might in the late seventies chrysler brought out the the new yorker a large rear wheel drive car

they invested fifty five million dollars to completely refurbished a plan to build it with the latest an automated equipment that that car didn't sell regardless of what the question of labor costs were so while kot won't give backs or cutting labor costs may be an effective short term profitability it may in fact mean that dealing with a long term issues or even more difficult wage concessions requested or conceded in a recession are not new usually what is different about this current situation well beyond the proms in the marketplace as you say every time there's trouble in the marketplace the issue of concessions come up but that they were dealing with really two additional fat tourists on the political climate in new technology in terms of the political climate it's been a long time since an administration has been viewed as anti labor or to the extent that the reagan administration at us ah but beyond that we're saying a very powerful technology odd that makes it very possible for auto companies to de centralized a

production throughout the world and also to introduce robots at home to make real threat to take that jet engine casting plant out of alabama and put it in another country absolutely and one of the strange things about the whole issue of concessions is even fairly substantial concessions may not stop that process attention today is focused on sheffield but ford is also breaking ground already in mexico for an engine plant that will produce six hundred and sixty thousand units a year on this is really the beginning of a major trend and roger smith today gm are told the new york times that for each dollar an hour more in wages the uaw members get gm will put in a thousand robots so that threat today is in fact are very real have the unions today meeting as they are right now in your work and looking at their own label on the state of their health have they and the uaw in particular dr howard the strength of whatever to stand up to this if they resist the odd that's not an

easy question to answer i think the power is there but it's going to require a very tough struggle oh it's very tempting in a sense in the short term are to look at concessions as a viable out ahmed the current distressed the industry the sickness of the industry certainly isn't doing autoworkers and good but in the long term it's dark what the concessions will work are at the uaw has ever had the power to deal with this it unfortunate has to be today because its leverage will infect the road and all by the use of technology and by the de centralization of production so you're saying if they're going to make a stand that they had better make it now because it'll be harder down the line and i think they will aw i think there certainly are going to be a lot of pressure in that direction to make a stand all the workers have seen their wages from nineteen seventy nine a supporter of seventy nine disciplined of eighty one in real terms declined all over the long term from let's say the late fifties to the middle seventies all the wages of all the workers have in fact in real terms trailed

the increases in productivity slowing many autoworkers feel that they should not be the ones to pay for the restructuring of the industry today and finally an industry view what's going on and comes from audrey freeman a labor economist with the conference board a business research group based in new york city is a worker concessions only as a short term solution as mr shaiken those no i think it would be a long term solution if wage bargaining in the auto industry and in the steel industry and the rubber industry were more affected by market forces in those industries wage bargaining in the past to set up almost a permanent arrangement where wages are linked to inflation rather than to the profitability of the company to the industry's position to that physician in the business cycle and that industry in the united states economy and so wages have been insulated from all of the economic effects that do raise and lower wages and are economically rational

yes it was somehow bargaining could be returned to at least a less automatic something of the wages then some jobs might be preserved because i think the auto workers steel workers and rubber workers in particular aria world market now meeting with other world workers to be specific then that same day the workers at the sheffield plant should necessarily be paid as much say as a red ford workers and a comparable plan in detroit soldiers and that's right that the company really should not pay more than that which would be required to draw forth the appropriate quality and quantity of labor in that location mr jacobs point that it's not that labor shouldn't have to bear the burden of the restructuring of the auto industry that it was management for instance that made the decision to build chrysler new yorker not the uaw well that was the uaw that decided to leak

wages to inflation and automatically pump them every every three months no matter what the individual position of the company was no matter how old the auto market was going no matter what the productivity of japanese auto workers is and the productivity in other countries of auto workers is much higher so their wage increases our own flow along with their improve productivity in other words the ottawa the auto industry says that labor costs here in the united states are not competitive with overseas manufacturers that is not just rhetoric that is that is real yes the labor costs are really two things there with the wage rates paid to us workers and the productivity of us workers we could continue to afford giving twelve percent wage increases say two auto workers or maybe we'll hire them that's to work as if we had twelve percent improvements in productivity every year in those industries but we haven't we've actually had constant or declining rates of productivity in those industries so the wage rates

immediately translate into increased labor costs and they price our products out of the market what about mr jenkins point that even with all the wage concessionaire say the way debbie it goes along with all that knows exactly what management was that it's still not going to solve the problem of the islanders well i think the management is already responding to a changed market perhaps not as fast as we would like and perhaps not fast enough to catch all those people are buying japanese cars but they're scrambling to catch up with the market this is an area also where i think they're scrambling to catch up after really a decade of wage inflation to try to readjust that wage inflation what about the point that mr mccann was the uaw local official in sheffield night which is what he really said well this is as ford's attempt to well the negotiations and to break a companywide their union negotiating tool as that is that that

in fact it's all right he's right about that well ultimately i think in again an auto and steel and it's already happened in rubber bargains nationwide bargains will be broken up and it will not any longer be pattern bargaining in other words there won't be one master contract covering all the plans of a company no matter what they make in this case the casting plant for example not an auto assembly plant and it won't be any longer uniformity from one industry to another so that bargains pattern out out of the steel industry into copper aluminum ultimately we will return i think to plant by plant bargaining end that means industry line by pipeline by product line and company by company thank you mr flint your thirties as the beginning of the end of an industry wide and pattern bargaining law what's important is that the industry has to build a better car and the lower priced car or they're not going to be here there's fifty percent foreign car

penetration the state of california that's tomorrow you're looking that they know whether its plant by plant or industry unless there's some kind of price really the auto companies are going to be moving more work abroad where they can build the vehicle than the park's cheaper and if the union doesn't want to take part in this than twenty years instead of being a million auto jobs in the midwest it's going to be happy until you were going to hang together they're going to hang separately plant by plant company by company industry by industry i don't think the american people want to buy these vehicles for twelve thousand dollars that's not going to be change that the industry is going to suffer and all those jobs are going to go away your group can i know i don't i think there's more to the province of the industry today than just the simple question of wage cost all one of the things that mr flynn sprinting up the fact that production is being decentralized in the jobs maybe lost that dynamic

that restructuring of the industry may take place in spite of concessions we're looking at a different world where the auto companies are seeking to maximize their profitability on a world scale that means to them automation at home and sourcing are jobs where they're at least expensive throughout the world regardless of the social cost not only daughter workers but to communities in the united states are that there's more to it than just the question of labor cost but what about those defense point because they don't have the autoworkers decide not to hang together and hang separately in a few years' time there will be anything like a number of other jobs in this country i got it i would in fact agree with that that it's going to require a very concerted response from the uaw on that attacks not only the question of wages but the question of the structure of the industry i'd also like to respond to a point that thomas friedman brought up ah but the question of the wages in the industry being tied to inflation all while it's true there's a cost of living escalator all that from nineteen fifty seven to nineteen seventy nine on the

increases in productivity in the industry exceeded all the real wages that were won by uaw workers sort one can hardly make the case that it was the wages of uaw workers that fueled all the price rises in the industry i want to ask each of you to grow readers and predict what kind of strife this is going to produce from looking at the industry from your perspective or mistreatment do you think that the uaw going to dig in its heels and we're going to have a lot of real labor strife or they're going to lie down like lambs be forced to accept this both versions are a little extreme i think the uaw is a very realistic union and recognizes the trouble but its industry its really it's all industry is in and it will make adjustments will make investors even to nationwide marketing no two companywide contracts and that's really what's being asked here this this particular plant is being asked to remove itself from the mess to contract and yes that would that seems as if it would be a first actually it's not a first there are there have been two

plants in michigan in sterling heights and in livonia michigan where ford went to the end workers the locals and said we want some changes in overtime and working conditions and scheduling know that's not wages but its it pays money the scheduling in overtime arrangement and unfortunately that's right and they asked for diversions from the master contract in fact i'm special arrangements of forgotten and those plants now will stay open mr flynn do you predict a a big labor struggles is going to be a big showdown struggle over this or that the uaw will will go along i don't think there's going to be of enormous violent struggle because i think the companies will say if you don't want to cooperate fine we want to struggle we won't fight over a period of years we'll know i would hope that some compromise would be made it very difficult for

unions traditionally don't like to give up things that they've won until bankruptcies at the door by then it's to my ideal i'd be a little pessimistic but the uaw is a great beauty and perhaps they could face up the reality it wouldn't be the end of the world but they will if they want to save that industry for the united states and for detroit in the midwest than they really have to work together thank you was to plant items to shake in history and journalist might imagine an iraq that's overnight we'll be back tomorrow night and robert mcneil the company has become speaker send two dollars to the

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