In the fall of 1945, just weeks after the war ended, Reuther was pushing two highly ambitious bargaining demands that he hoped would chart a course for postwar industrial America. First, he sought a 30 percent raise for the UAW’s 175,000 members at GM (equivalent to thirty-three cents an hour). GM’s workers were feeling explosive frustration after years of a no-strike pledge and wages lagging behind inflation. Moreover, Reuther argued that GM could afford to grant large raises while keeping its prices frozen because its production had risen 50 percent since 1941, its productivity was climbing by nearly 3 percent a year, and it had a 28 percent return on investment in some quarters. He believed passionately that workers should share in the benefits of their own and their company’s increased productivity. Second, Reuther demanded that GM agree not to raise its sticker prices, fearing that if the nation’s largest corporation hiked its prices, it would generate a wave of me-too price increases across America. That, Reuther feared, would wipe out much of the raises the workers received. That second demand grew directly out of the wartime practice of administering, and limiting, price increases. Indeed, Reuther pressed President Harry S. Truman’s Office of Price Administration to back him by ordering GM not to raise its prices. That second demand also reflected Reuther’s, and much of labor’s, view at the time that unions should have a real voice on fundamental issues like production and prices.

GM vigorously disagreed with Reuther. It offered a thirteen-and-a-half-cent raise (a 12 percent raise) and scoffed at the demand that it not raise its sticker prices. Joined by other automakers and the steel industry, GM urged the Truman administration to eliminate price controls. (To help raise take-home pay, GM also proposed getting Congress to legislate a forty-five-hour workweek to replace the existing forty-hour week. Reuther denounced that proposal as a major step backward, saying that GM was baiting the union and asking for a strike.) Reuther told GM that he would lower the UAW’s demand for a 30 percent raise if GM opened its books to demonstrate that it couldn’t afford such an increase. GM insisted that wages should have nothing to do with profit levels and refused to open its books or up its wage offer. “I am greatly exercised—perhaps unduly so—by the philosophy of ‘capacity to pay,’ ” Alfred Sloan wrote to another CEO. (Many workers saw GM’s stance as manifestly unfair, although GM’s view from the 1940s has come to dominate corporate America’s current view, with many companies refusing to give their workers raises large enough to keep up with inflation, even when their profits are soaring. That’s one of the factors fueling today’s income inequality.) Charles E. Wilson, GM’s president, told Reuther, “We shall resist the monopolistic power of your union to force this 30 percent increase in basic wages.” “Automobiles,” Wilson added, “would shortly cost 30 percent more to produce.”