Auto's New Deal

Linking wages to car prices

The plan unfolded with a precision that is seldom seen on the assembly line. During a meeting in early November, United Auto Workers President Douglas Fraser suggested a bold new proposal to General Motors Chairman Roger Smith: How about linking any reductions in autoworkers' wages or benefits to cuts in the price of GM cars? During the following month, Fraser met secretly with Smith on the 14th floor of GM's headquarters in Detroit. Last week the deal was announced.

The agreement may permanently change the relationship between company and union in the automobile industry. The U.A.W. has agreed...

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