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January 07, 1968 - Image 8

Resource type:
The Michigan Daily, 1968-01-07

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GM's Modest Mutual Aid Proposal



(Continued from Editorial Page)
by the auto makers it remains
significant. For it shows how the
two unstruck companies could aid
the struck company weather a
costly strike.
The document was clearly a
high-priority item that received
top-level GM consideration. It
was drawn up by the Cost-An-
alysis Section of GM and is dated
July 5, 1967. GM was clearly in
a hurry to draw up the proposal
because it was produced on over-
time. In July GM was on a pre-
strike austerity program which
sharply reduced overtime. Usually
GM Comptroller Ralph Mark or
George Russell who was - then
GM's executive financial vice-
president (now vice-chairman)
had to give authorization for
overtime work.
The plan, which is published
below for the first time, shows
how the struck, auto company
"would be reimbursed for 40 per
cent of the production lost during
the strike (assumed sales loss) .f
it is possible for the other com-
panies to produce this volume in
four Saturdays of overtime."
"The rate of reimbursement
would be $500 per job not to ex-
ceed the struck company's lost
For example if Chrysler were
struck Ford and GM would build
12,000 cars on a Saturday over-
time which is 40 per cent of
Chrysler's weekly production.
Then Ford and GM would pay
Chrysler $500 for each of the 12,-
000 cars or a total of $6 million.
The plan works the same way
in the event of a Ford strike. But
if GM is struck a different system
is used because Ford and Chrys-
ler are incapable of building 40
per cent of GM's weekly output
(43,000 cars) in a Saturday's out-
As a result Ford and Chrysler
would build as many cars as pos-
sible on an eight hour Saturday
overtime-18,000 cars. Then Ford
and Chrysler would pay GM $500
for each car it made.
Then for the additional 25,000,
extra cars they couldn't make on
Saturday overtime Chrysler and
Ford would pay GM $200 apiece.
Al told Ford and Chrysler would

pay GM $14 million. (See Ex-
hibit D)
THE MAJOR advantage of the
plan is that "each company's" re-
imbursements from the other com-
panies are approximately the
same as the potential payments
of the other companies if they
were on strike."
Obviously the purpose of such
a plan would be to help the
automakers resist union demands.
Theoretically this would help the
struck company hammer out a
more favorable "pattern" contract
for itself which would subsequent-
ly benefit the other two com-
It is not known if this specific
proposal was shown to the other
auto companies. GM vice-presi-
dent Louis Seaton conceded in
July that "many questions" are
being researched internally and
Ford Motor Co. Vice-President
Malcolm Denise says his staff has
"looked into a lot of things and
some things have been put on
paper. I wouldn't kid you that we
haven't looked into the mutual
assistance plan in the rubber in-
(During the rubber industry
strike last year management used
a mutual aid pact.)
In July the Wall Street Jour-
nal published a short description
of the mutual aid pact below. The
report was presumably tae basis
for charges leveled by the UAW
International Executive Board on
Aug. 31 that there was "an
industrywide conspiracy inspired
and dominated by GM."
The UAW said that "General
Motors Corporation is .. . dictat-
ing to the industry and that GM
is the chief architect of a con-
spiracy that is interfering with
free and independent collective
bargaining between the UAW and
other corporations."
eled after Chrysler Corp, "refused
to agree to" an offer that would
have made possible exten-
sion of the existing contract and
eliminate any possibility of Chrys-
ler being chosen as strike target.
The UAW explained that it
made the "good faith offer to

Chrysler" because it did not want 25 per cent of its normal operat-

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to aggravate economic problems9
caused in Detroit by last sum-
mer's riot. (Chrysler is the largest
single employer in Detroit.)
As it turned out, however, there
was no mutual aid pact, at least
as outlined by the July 5 GM
proposal. A check of production
figures show that the number of
cars produced on overtime by GM
and Chrysler during the eight
week Ford strike proved to be
substantially below the figure
proposed in the plan.
It is true that GM did try to
schedule heavy overtime in No-
vember and December. However,
most of this work was scheduled
after the Ford strike had ended.
And UAW officials do not believe
this was related to any mutual
aid pact. Rather they think this
work was primarily a GM effort
to build up a backlog of cars in
case it was struck in late Decem-
ber or early January.
overtime plans by authorizing
unions to strike an amount equal
to scheduled overtime. For ex-
ample if the workers worked eight
hours overtime one week, they
were authorized to strike for eight
hours the next week. About 40
local unions conducted one day
strikes on this basis during No-
vember and December.
While it does seem clear that
GM's mutual aid pact did not go
into effect, the proposal still of-
fers a useful index of auto indus-
try thinking.
Mutual aid pacts are becoming
more and more popular in indus-
try. The airlines have had mutual
aid for about 10 years and in the
rubber industry a mutual aid pact
was used last year.
In summer of 1966 when four
airlines were struck for six weeks,
the m a j o r unstruck carrier,
American Airlines paid $29 million
to the struck airlines.
Basically the airlines have re-
lied on two plans. One has the un-
struck airline share its "windfall"
picked up because other carriers
are struck. Under the other plan
a supplemental payment is com-
bined with the windfall to help
the struck company defray up to

ing expense.
The rubber industry's plan is
more secretive. However, Good-
year Tire & Rubber Co. did pro-
vide tires to customers for three
major companies that were struck
12 weeks before Goodyear itself
was struck. It is believed that
some money did change hands.
had gone into effect it clearly
would have dwarfed the airline
and rubber plans. According to
the proposal Ford would have been
paid $12 million in the first week
of the strike alone by GM and
Chrysler. Over the eight week
strike Ford would have picked up
about $96 million in "unemploy-
ment compensation."
The payments were computed
on the basis of GM and Chrysler
paying Ford $500 for every car it
could build on Saturday overtime.
GM figured it could build about
18,800. At $500 apiece that is $9,-
400,000. Chrysler could have built
5,200 cars on Saturday overtime
which would total $2,600,000.
These payments combined would
total $12,000,000-Ford's windfall.
Had this plan gone into effect
the bargaining ritual could have
been substantially altered. Indeed
$96,000,000 in aid from GM and
Chrysler could have considerably
strengthened , Ford's bargaining
Although the plan was not used
this time, there is no reason why
it or a variation could not go into
effect in 1970. The impact would
be devastating. For the old and
careful pattern of auto negotia-
tions could turn into a bitter
Copyright, 1968,The Michigan Daily

(Continued from Page 2)
Botany, zoology, Cartography, EDP,
Insurance, Library, Mgmt.rTrng., Mktg.
Res., Merchan., Persn., Production,
Publ. Admin., Publ. Relations, Purchas-
ing, Recreation, Secretarial, Social Wk.,
Stat., and General and Technical writ-
Employers' Group of Insurance Com-
panies, Detroit, Mich. -M & F. Bach.
Econ., Gen. Lib. Arts, Geog., Hist.,
Journ., Math, Poli. Sci, Psych. and
Soc. for Insurance (Home Officeand
Claims), Mgmt. Trainee (Insurance
Underwriting), Actuarial Trainee, Audi-
tor Trainee, Claims Adjustor Trng.
and Engrg. Tech Trainees.
Ontario Department of Lands and
Forests, Toronto, Canada-P.M. only
BA/MA Nat'l. Res., Forestry, Conserva-
tion, and wildlife Mgmt. for Biol. and
Zool. positions.
Chemical Abstracts Service, Colum-
bus, Ohio-P.M. only. All degree levels
Libr. Sci., Math, and all areas of Chem.
for EDP, Library, Production and Tech-
nical Writing.
S. D. Warren Company, Muskegon,
Mich.-P.M. only. BA/MA Econ., ECgl.,
Gen. Lib. Arts, and Chem. for Mgmt.
Trng. and Production.
Tuesday, January 16, 1968
Philip Morris Incorporated, N.Y.C.-
M & F. P.M. only. BA/MA Econ. for
Foreign Trade, Mgmt. Tng. Production,
Finance, Acctg., Mktg. Planning, Con-
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Smith Kline & French Laboratories,
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Philadelphia, Pa.-M & F. BA/MA Econ.,
Engl., Gen. Lib. Arts, Hist., Journ.,
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P.M. only. BA Econ., Gen. Lib. Arts, ?surance, Mgmt. Trng,, Pub. Relations
for Mgnt, Trng., Personnel, and Pro- and Sales.

Math, Microbiol., Pharm., Phila., Psych., duCtlonjCiyoDerteriMch-e
Pol. Sci., Soc., Anal .and Organ. Chem., U.S. PublicBHealth Service. Detro CtiWednesday listin g for further informa-
and Biochem. for Adv., Biol., Zoo., For. Mvich.-Men, BA Econ.. Educ., Engl., For.Idine a itn o frhrIfra
Trade, Mgmt. Trng., Mktg. Ris., Person., Lang., Gen. Lib. Arts, Geog., Hist., partment of Commerce, Office of
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Mktg. Res., Merchand., Person., Pro- S.S. Kresge Company, Detroit, Mich.- Mich, see Wednesday listing for further
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Ross Corporation, Cleveland, Ohio.- majors and all degree levels for in- are interested in MAT Program.

NOUNCEMENTS is available to officially
recognized and registered student orga-
nizations only. Forms are available in
room 1i1 SAB.
Bach Club meeting, Jan. 10, 8 p.m.
Guild House, 802 Monroe, listening,
talking, etc. For further information
call 769-1605,
Art Print Loan: All students who re-
newed their prints for the winter
semester and have not paid, bring
your money in to 1011 SAB.

-save hours, use your time more efficiently
-learn to read 3 to 10 times faster than you do now
-improve your comprehension and increase your
enjoyment of reading material
Bring a book to a live demonstration of the
reading skills which will be taught in a
GUARANTEED course offered this semester.

Demonstrations starting this week Tues. & Thurs., Jan. 9 and 11, 7:30 P.M. at
the Bell Tower Inn, 300 S. Thayer St., across from Burton Tower.




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dice cadsspiners orothe chncedevces re nvoved n tis dul
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ay, January7
Sponsored by UAC, Office of Reliigous Affairs, SGC,
Panhellenic Association, Office of Counselling
Implications of a Turned-On Sodi



EDGAR Z. FRIEDENBERG-(Author: The Vanishing Adolescent,
The Dignity of Youth and Other Atavisms)
DR. JOHN POLLARD-Prof. of Psychiatry, Mental Health Research Institute
MR. HAROLD ROTHWAX-New York Lawyer, Mobilization for Youth, Inc.
JOHN SINCLAIR-Trans-Love Energies, Inc.
DR. JEROME JAFFE-Prof. of Pharmacology, University of Chicago
MR. DAVID MALIN-Graduate Student, Psychology

MC5 Rock Band Concert-Aud itorium



a a





to attend the

DRUG USE AND ABUSE: Medical and Biochemical Aspects
DR. JEROME JAFFE-Prof. of Pharmacology, Univ. of Chicago Medical School
DR. HERBERT RASKIN-Detroit Psychiatrist
DRUGS AND THE LAW: Legal Restrictions and Outlook
MR. HAROLD ROTHWAX-New York Attorney, Mobilization for Youth
SENATOR ROGER CRAIG-Michigan State Senator who has introduced a bill
to liberalize the current Marijuana laws in the state
MR. ROSS ELLIS-Treasury Department, Bureau of Narcotics
MR. DONALD SCHNETTLER-Bureau of Drug Abuse Control
Psychological Responses
PROF. DAVID GUTMANN-Prof. of Psychology, Univ. of Michigan
DR. JOHN POLLARD-Prof. of Psychiatry, Univ. of Michigan
PROF. MORTON SHAEVITZ-Prof. of Psychology, U of M, Office of Counselling
DR. CHARLES SCHUSTER-Prof. of Pharmacology, Univ. of Michigan
JOHN SINCLAIR-Trans-Love Energies, Inc.
Documentary and Experimental Films





busts-Mr. Harold Rothwax
comparative pharmacology-Dr. Charles Schuster
3 psychedelic experiences-David Malin




111 1 111

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