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Mr. WANIK. Mr. Steiger? Mr. STEIGER. Mr. Woodcock, I am deeply grateful to you, as I was to Governor Thomson, for the very fact that you would be willing to o and make your oral presentation. It is indicative of the very deep interest the UAW has in this field and the kind of leadership you have given. There is another way to look at all of this from the perspective you have given us. Let me raise it with you, and let me let you shoot at me. The criticism you make of the State employment service, the relationship between CETA, the training aspect, and the impact of import activity stems, it seems to me, not so much from the agencies or who is doing it as it does from the fact that we have different programs with different guidelines and different criteria. One could argue, I think, that we ought to have a program in place, a manpower system that is sound enough to review problems that may arise as to whether there is lack of skill, training, or imports. And, therefore, looking at it from the standpoint of trying to play with the pieces that exist now, rather than talking about yo one does to fit those pieces together more effectively than We dio. I have been bothered by the concept of an unemployment program for workers on imports as a separate kind of program. Why should you have a separate program just for that, rather than having developed our own basic unemployment compensation well enough so that it could respond in those kinds of cases? How do you react to an analysis when one looks at it from that perspective? Mr. Wooncock. Let me say first, sir, that the concept is that society is better off by getting these imports which may be cheaper, or whatever, and therefore reduces costs to the consumer, and therefore it is a general society benefit, and you proceed from that. Why should this group of workers who are adversely affected by it as a small portion of the total society pay the full cost of the benefit to the total society, and from that flows the notion that they need some special treatment. Having said that, let me say I agree with you in the broader concept, if we had, for example, a full employment economy, and then displacements by virtue of imports would be much more easily handled than in a society plagued by very high levels of unemployment, the highest levels outside of recession periods that we have had since the 1930's. I think, too, the question of manpower placement and all the rest, would be much better handled if we had a truly national system, than varying systems at different standards and different qualifications, and so on and so forth. Absent a total commitment to have a rational economic system, then we have to attack it in bits and pieces as the problems present themselves. Mr. STEIGER. I met yesterday with some new employment security administrators who were here for a training session at the interstate conference. We got into a discussion of this very point. I raised with them the fact that there has been a substantial amount of criticism, not just yours, but others, to the role of the State employment service in adjustment assistance. They are very mindful of their role. They recognized that they have not done as well as they should. They thought that was as much a function of timing and trying to get the knowledge out to the field as it was any other single factor. The act passed, and all of a sudden this whole new program went into place. In Phil Sharp's district, as you indicate in your testimony on his problem, they frankly said, “We did not get up to snuff well enough and quickly enough, we did not get all that material, and we were not able to get it out.” The other part of the problem is much more fundamental. Namely, all of the work that is required to certify what has to be done to say this companys' layoffs resulted from imports and trying to get all of that together. They said we ought to be able to look at that. They are going to send me some suggestions on what we could do to improve it from their standpoint. I will pursue that with the subcommittee. I have also suggested to this subcommittee that, frankly, I am not sure we ought to have this program. The trade adjustment assistance for workers really ought to be in the Unemployment Compensation Subcommittee, where Think a better job could `. done of putting it together. This would get me more toward what I would like to see, which is this meshing rather than the diverse parts that now exist. My hope is that, no matter what we do, we will not do it on our own, but in consultation and with very close cooperation with Jim Corman and Guy Vander Jagt and others to make sure we are doing the best job possible. I am very, very grateful to you for being willing to give us your time by coming here. Mr. Woodcock. We are critical of the State agencies, but they did have this new program piled on top of them when they had immense problems due to the depths of the recession of 1974–75. A good many citizens of your State, employees of American Motors, are happy with the TRA assistance they are getting since their subplans have effectively disappeared because of their poor place in the market. Mr. STEIGER. Yes, sir, I am very mindful of that. Mr. VANIR. Mr. Frenzel. Mr. FRENzEL. Thank you, Mr. Chairman. Mr. Woodcock, thank you for your testimony. I think it is extremely helpful. I want to thank you for your recent service to your country which you took on as an additional duty. I tell you we are all very grateful to you for that. Although you have been critical of the State agencies and of the Tepartment of Labor, I understand that you are not suggesting that we relocate that function, but rather to improve it, is that correct? Mr. Woodcock. We are concerned about the massive passout to the States, the authority. If it is to be done, then we would like to see much better supervision in how it is handled. Mr. FRENzEL. On the other hand, the community and industry assistance which is handled through the Department of Commerce has also been criticized, and there have been suggestions that that authority might well be relocated. Have you thought about that, and would you be willing to make a recommendation? Mr. Woodcock. From within Labor? Mr. FRENZEL. No; from within the Department of Commerce. I would think we would want to leave the employee assistance in the Department of Labor, but we might want to transfer the authority that is now in the Department of Commerce elsewhere. I wonder if you have had any thoughts on that. Mr. Woodcock. Could we submit a response in writing on that, sir? Mr. FRENzEL. Surely. Thank you, Mr. Chairman. Mr. VANIR. Mr. Woodcock, I had occasion very, very recently to raise some questions about the Canadian-American automobile parts agreement, and I have been concerned about the impact on American jobs in the production of automobile engines in a third country and then shipped into Canada and then brought in a vehicle under the Canadian-American automobile parts agreement. How extensive is this business? Can you give me any idea as to what impact it is having on American production? Mr. Woodcock. It has got a lot of visibility, sir, when Ford Motor Co. was bringing engines manufactured in Brazil, delivered for assembly into final vehicles in St. Thomas, Ontario, and bringing the completed vehicle under the auto pact without the payment of any tariff on that engine. At the same time when, in Lima, Ohio, at the Ford Motor plant we had substantial numbers of people laid off when we had substantial numbers off of making that same engine or an engine very comparable in its specifications. In terms of overall impact it is relatively minor, but that was a little difficult to explain to those several hundred workers in Ohio that its impact was limited Mr. VANIK. Those were the smaller engines for the Mustangs? Mr. Woodcock. It was going into the Pinto. Mr. VANIR. Do you have any idea of the numbers that come over annually? What would be the 1976 quantity? Do you have any way of knowing? When you look at an automobile, you cannot determine where the component parts are made, but I would suppose that you have a pretty good idea. Mr. Woodcock. First of all, on overall basis relative to volume of sales, total workers affected, it was never major except in the particular locality where it was impacted. With regard to the specific engines, it has declined in the model l"un. Mr. VANIR. That is because the whole model run declined. Mr. Woodcock. That is because of the relative decline in the sales of the Pinto, not because of change in company policy, and we pursued it very vigorously in our bargaining last fall. Mr. VANIK. You have no idea how many engines or components or units come over that way? Mr. Woodcock. We can get that. Mr. VANIK. I would appreciate your providing us with an update on that. We have some major plants in Cleveland. [The information follows:] -

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INTERNATIONAL UNION, UNITED AUTomobiLE, AERosPACE & AGRICULTURAL IMPLEMENT Workers of AMERICA-UAW, Detroit, Mich., April 20, 1977. Re: Additional information requested during the appearance of Leonard Woodcock before Subcommittee on Trade on April 1, 1977.

Mr. John M. MARTIN, Jr.
Chief Counsel,
Committee on Ways and Means,
U.S. House of Representatives,
Washington, D.C.

DEAR MR. MARTIN: On April 1, 1977, UAW President Leonard Woodcock appeared before the Subcommittee on Trade of the Committee on Ways and Means to discuss adjustment assistance under the Trade Act of 1974.

Congressman Charles A. Vanik of Ohio requested an update of the number of engines or other components that are being imported from outside North America under the Canadian-U.S. Auto Agreement. Under that Agreement, Canada permits the auto companies to import original parts from various countries duty free. It appears that the Ford Motor Company is the only company currently involved in this practice as we previously reported in hearings before the Subcommittee on Labor Standards of the Committee on Education and Labor on April 14, 1976. Currently every Pinto produced at Ford's St. Thomas, Ontario plant contains an engine supplied through a Ford engine plant in Taubate, Brazil. These engines were formerly produced at the Ford engine plant in Lima, Ohio.

Ford Motor Company also imports transmissions from Bordeaux, France. These transmissions were formerly produced at the Ford Sharonville-Fairfax transmission plant located near Cincinnati.

The Ford Motor Company truck plant at Oakville, Ontario uses transmissions from Mexico. These transmissions were previously produced at the Ford Livonia transmission plant located in Livonia, Michigan.

We are attempting to get the number of engines and transmissions involved in these situations from the Ford Motor Company. So far we have not been successful. As soon as we get the data we'll forward it.

Very truly yours,
GEORGE WEAver,
IResearch Department.

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Mr. VANIR. As you know, the act really does not address itself to this problem. It was never assumed there would be third-market goods coming in. It was never contemplated. In other words, do you think the agreement should be revised to address itself to this problem? How do you think we ought to treat it? Mr. Woodcock. The auto pact? Mr. VANIK. Yes; I am relating to Canada bringing in third-nation goods and sending them over the border free of tariffs. Mr. Woodcock. I would hesitate to give an offhand answer to that because there are many imported cars which look as a total offset in our balance of trade which contain American components, and that is more true of the European imports than it is of Japanese imports. I know with regard to Mexico, we have certain things going down there and coming back in. There has been considerable complaint, but, when you look at the overall balance of trade in automotive parts nd related things between the United States and Mexico, it is subtially adverse to Mexico. r. VANIK. The Canadians tell us we got the best of that agreeuent. Do you have any opinion on that? Mr. Woodcock. What happens, members of the UAW who live in he United States look at all of those Canadian-assembled vehicles yming south of the border and think we got the short end of the deal. Our Canadian members who assemble all of those Americanbuilt components into those vehicles think they got the short end of the ...} All things considered, I think the package has worked very well. The alternative was that Canada would have gone the way of Australia or Brazil and had a sealed-off industry, heavy domestic content, which would have been worse for both countries, I think. Mr. VANIK. I would appreciate it if you can bring us up to date on this problem. I know the last statement we had was last September, and I would appreciate an update on it. I think we should be aware of it. I think it is something we ought to look at very, very carefully. Mr. Woodcock. I am reminded in my testimony with regard to the auto o I said the duty-free should be raised from 55 to 75 percent, but it has never come anywhere near 50 percent. Mr. VANIK. I assume you meant Canadian content? Mr. Woodcock. North American content. Mr. WANIK. Mr. Woodcock, I have one other question here. Yesterday we heard testimony from the United Steelworkers suggesting that the problems created by narrow definition of adversely affected employment takes care of bumping cases by allowing the worker who is ultimately to be displaced to be eligible for adjust. ment assistance. Is this solution satisfactory in your view? Mr. Woodcock. I think this relates to the testimony we have here relative to appropriate subdivision. Mr. VANIR. Is this solution sufficient? Would you concur, or are workers bumped along the line, alsoMr. Wooncock. As I understand, the steelworkers are saying here is the individual affected, but under their seniority system they can bump out Jones. He loses his job because of the import penetration. Obviously, we would agree with that, but beyond that, we are concerned about the appropriate subdivision being widened. Mr. VANIK. Thank you very much, Mr. Woodcock. We certainly appreciate your time and your very thoughtful statement. We know we have a problem. We have a task to do. And we are going to address ourselves to it. The next witness is Rudolph Oswald, director of research of the American Federation of Labor, accompanied by Ray Denison, who is almost a member of the committee. he is here so much. We would be very happy to hear from you, Mr. Oswald.

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CTATEMENT OF RUDOLPH OSWALD, DIRECTOR, DEPARTMENT OF RESEARCH, AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS, ACCOMPANIED BY RAY DENISON, DEPARTMENT OF LEGISLATION

Mr. Oswald. Thank you, Mr. Chairman.

For the record, with me this morning is Ray Denison, legislative assistant for the department of legislation for the AFL–CIO.

The AFL–CIO welcomes this opportunity to review the operation and effectiveness of trade adjustment assistance for workers, firms, and communities. The AFL–CIO is familiar with adjustment assist

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