THE ECONOMY: The Bind in Steel

Before last week’s final negotiation session broke up at Pittsburgh’s Penn-Sheraton Hotel, steel industry pressagents handed out releases that left no doubt that the meeting was going to be another flop: “Anxious as they are to see an end to this devastating strike which the union has forced upon the country . . . the eleven steel companies must continue to resist surrender [to] an agreement which will promote inflation, produce rising production costs and perpetuate wasteful, inefficient practices . . .”

A few minutes later, wavy-haired United Steelworkers President David J. McDonald drifted in to talk sonorously to scribbling reporters. “We’ve engaged in another exercise of futility. Industry deliberately maneuvered and stalled and engaged in all kinds of fakery.” Industry strategy, he charged, was to depend upon the Taft-Hartley law’s 80-day injunction as “a bargaining tool” to drive strikers back into the mills.

The Big Difference. Both sides were waiting for the U.S. Supreme Court to uphold or reject the U.S. petition for a Taft-Hartley injunction suspending the strike for 80 days. But the McDonald v. industry exchange on the strike’s 109th day revealed a crevasse too wide to be bridged by Taft-Hartley injunctions, or even by the Federal Mediation and Conciliation Service’s summons for both sides to report to Washington this week for talks.

Long since eliminated from the stalemate were such negotiable issues as wage hikes, on which the gap remained only a cent an hour. The big difference was one of principle, to wit, the industry’s need for more flexible work rules so that the mills can use their work forces more efficiently to cover the costs of higher wages and higher benefits. Snapped R. Conrad Cooper, U.S. Steel Corp. vice president and top industry negotiator: “The basic position of the steel companies is not about to crumble whether or not there is an injunction.” And even though auto assembly lines, tractor plants and construction projects were shut down—and unemployment spread to 300,000 beyond steel’s own 500,000 strikers—U.S. industry seemed generally willing to back the steel companies on principle.

Union Power Play. Early in the week McDonald scored on his divide-and-conquer campaign in a friendly contract-signing session with Chairman Edgar Kaiser of California’s Kaiser Steel Corp. (2% of steel capacity). Steelman Kaiser (see BUSINESS), refusing to stick with other operators through the injunction procedure, signed a 20-month union contract giving his 7,500 employees a yearly wage-and-fringe-benefit boost worth 11.25¢ an hour, only a quarter of a cent more than the last industry-wide offer. To the Kaiser company, the terms made special sense because of its special situation, which includes a $14-a-ton West Coast premium on certain steel shapes, a newer work force costing less for pension improvements.

Kaiser got no substantial changes in work rules, but with an efficient new plant he is happily spared the worst abuses of the work-rule tradition anyway.

Union Boss McDonald exploited the break by signing Kaiser-style contracts with Detroit Steel Corp. and Granite City Steel Co., small companies (less than 1% of U.S. capacity each) that have been operating throughout the strike on union-granted contract extensions. But McDonald’s drive never got beyond the easy pickings of the minors, soon hit the stiffened wall of major company resistance. Top steel negotiators declared that the Kaiser contract 1) would cost non-Kaiser companies nearly half again as much, 2) provided contract reopening in 1961, which was “intolerable to all,” and 3) left work rules to be settled “on a case-by-case basis at the pleasure of the union.”

Court-Order Delay. Coupled with its attempt to split management ranks was McDonald’s attempt to keep up the strike pressure by delaying or destroying the back-to-work injunction handed down in Pittsburgh Oct. 21 by U.S. District Judge Herbert P. Sorg. Union Lawyer Arthur Goldberg, though losing a 2-to-1 decision appealing the case to the Court of Appeals in Philadelphia, won Supreme Court agreement to review his arguments that 1) Taft-Hartley injunction procedure is unconstitutional, and 2) in seeking the injunction on the ground of damage to “national health and safety,” the U.S. had not proved that there was real damage. His delay tactics had won two extra weeks or more for the strike’s effects to wear upon management, postponed the end of the So-day period until late January. This prevented the union-feared prospect of ordering members to resume the strike on the heels of the Christmas holidays, but it also guaranteed that a strike-weary Congress would be in session when the injunction expired, possibly tempted to solve the impasse with compulsory arbitration.

Injunction or no, the unprecedented steel strike badly needed some kind of cooling-off period. Some industry men were talking grimly about a war of attrition that might rage on for an additional six months. The steelworkers were working hard to convince other unions that this was a basic fight for all labor.

In demanding work-rules changes to increase efficiency, the steel companies had a strong case to make. And the steelworkers, for their part, had never been a union dedicated to featherbedding. By trying to make the changes in a sweeping manner, the steelmen had solidified labor into a newly militant front and lost much public support. Like many a controversy based on principle, the differences were far more apparent than substantial, might well yield to settlement if both sides would make the most of a cooling-off period to try a new approach.