. "I" PAGE EIGHT THE MICHIGAN" DAILY SUNDAY, JANUARY 7, 1969 PAGE EIGHT THE MICHIGAN DAILY SUNDAY, JANUARY 7,1968 vv p"rrfY+ > ::":;::... ---:.-. ."a\~ GM's Modest Mutual Aid Proposal DAILY OFFICIAL BULLETIN :9 (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 sales." 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- put. 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- panies. 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- dustry." (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." THE UAW CHARGES were lev- 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- ...; .....,. ,... k 1'..k ::";¢^r."a;":.".vx::,::Y :"o:::: ":.'.',,. ""rr::."::.: r: -:: a:Y:,Y:.v.::. ".tv.:v: v..::: ::::::.:Yr.^:::.1-: vn:-o': ":. " ........:::.1.....:::..:1 :11'.'."...Y". ... ...................1. G.....,.......1........ ...... ... a'.............. '.::1 v ". Y:N: VS".'::: r.'::::.. .".":.".'.tv':: ":::: tVV.v.: ,.. ..":. p... .,... ...... . .., .. ......., ': t 1 .. h...... 1..: ..... ...... :......... 1.. ..1! 1....1.14. ..A.:.. ............ .....4..1....1 ... .1111..."".1. ..:..........: 1".:YSYl:::: "::. .'.:...... ..}." .. . .:: A' 11'.".' V ":.. . . .t .... . 1 . .1............ " . ..t4.1 1.11 V i t "} . ....::'::.':::.t....1 .1 . 1.1 ". 1. 11.....1 ... .........1 .1.... ." " ... ..f .... ..... '...,.. .....1. .''. . .1.. ..........................1.....:......1 .. 1.......1....... . , h.:1 ........-.,... -1:"........ "x".:..11:".:.{.+.'s.:"...1.t ...... { i1{ d" . :{t{'.:::...a...:J..1.:1.k.Y:11}':V:x .....................5 }.:.'.:.: :: .. d... ..1d4....... . 1... .. .t..... 1 :1 r . "4 " :1.1 }:. ':, "4:. 1 5" y}Y"{ .1.........1.1.., .1. r........,1 :?~ :':.+ +.:.,,:"".:w x:11"+::,.: . ,"k .1? ; :ac " ; .::,.;,: : .,.,>s:>:;5 's f..:111''Y' :±: . x 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. THE UAW REACTED to GM's 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. IF THE GM MUTUAL aid plan 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 position. 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 stalemate. 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- ing. 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. 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IFAST READING IS NOT DIFFICULT TO LEARN 1 USE OF THlS COLUMN FOR AN- 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. SEE HOW EASILY YOU CAN: -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. I 1 i c ., t . . . .. . . .4 . . .. . .. ... .. . 2. .. , .... r ... 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