Show BUSINESS USeI SS and end the STOCK MARKET by BABSON'S REPORTS Copyright 1972 CLOUDS ON LABOR HORIZON Labor relations have been relatively placid during the year year now drawing toward toward toward to to- ward its close with a substantial number number num num- ber bar of quiet settlements in many small industrial firms but no big scale big scale negotiations negotiations dominating the scene As 1973 unfolds however the situation promises to be quite different from 1972 since more than workers in several outstanding industries face contract expiration or renewal in the course of the new year There will be significant union bargaining bargaining bar gaining sessions in electrical manufacturing manufacturing manufacturing rubber cement building autos trucking clothing services transportation transportation tation lotion equipment food and retail trade Although wage controls are expected to continue for an indefinite period well into 1973 labor 1973 labor has no intention tion tian of adhering to the rules odes If the current current current cur cur- rent ceiling of 55 percent in annual raises and the 07 percent in fringe concessions concessions con cessions are kept in force union negotiators negotiators neg will not hesitate to press for considerably more sizeable pay and fringe fringe fringe ge benefits than the Pay Board yardsticks yardsticks yard yard- sticks slicks will permit Pattern of Wage Increases It should be noted that the guidelines of the Pay Board were by passed quite frequently in the current year Wage rate increases won in the first six months months mon mon- the of 1972 averaged 75 percent for the first year of the contracts' contracts life While this represented a sharp reduction from the first year first year average raise of percent percent percent per per- cent racked up during the first half of 1971 it is still well above the supposed ceiling of 55 percent allowed on an annual basis And demands being made against companies in upcoming bargaining bargain bargain- ing sessions are even less moderate Petrochemical workers for example I have asked for a 50 cents hour cents an hour hike in their new contract plus another 50 i cents in the second year year This means that the first year first year gain alone would a amount amount amount a- a I mount to 10 percent while additional costly fringe benefits are being sought sought- including paid hospital and medical care better pensions more liberal shift differentials and research in connection with a health and safety fund to be administered by the union and management manage manage- ment Important 1973 1913 Negotiations A 40 month 40 month agreement will be running P out for electrical workers by the first e of May next year so bargaining will doubtless doubtless doubtless doubt doubt- less be under way sixty to ninety days before that time Here again demands r will probably be of broad scope and expensive expensive expensive ex ex- pensive for management The pact approaching approaching approaching ap ap- expiration in the early months months mon mon- of the tho new year was agreed upon only after a strike lasting more than three months at a number of plants during during dur dur- ing 1969 1909 and 1970 r The Teamsters Union n a particularly aggressive organization is heading into bargaining sessions around midyear Trucking concerns may hold out against exaggerated demands from the union but chances are they tiley will not be tough enough Dough to breed a critical strike that could tic tie up many industries throughout the country It could be that employers will give in somewhat granting larger raises than those permitted in the hope that the Pay Board will shave them back later on when the pay structure is of course that the Board Doard is still in operation by that time Rubber and Automobiles Rubber and auto unions have long been pace setters and next year they are arc not likely to play a different role Look hook for both to demand exceptionally large pay increases as well as some expensive ex pensive fringe benefits Auto giants willbe will willbe willbe be reluctant to take tak on heavy new labor costs unless they feel that they can r pass at least a good part through to consumers con a sumers in the form farm of l price boosts s However no matter how this works out the Research Department of Babson's Reports is of the opinion that auto prices will ill be increased once more on 1973 models even if the companies do absorb part of the hike in labor costs rr |