Senate Favors Notice Before Plant Closure : Worker Warning Plan Could Prompt Trade Bill Veto, Critics Say

In a proposal that opponents warned would guarantee a presidential veto of the omnibus trade bill, the Democrat-controlled Senate voted largely along party lines Thursday to approve a provision requiring manufacturers to give 60 days’ notice of plant closings or substantial layoffs.

And, in an unexpected move, the Senate reversed an earlier vote and gave President Reagan discretionary authority to deny protection to U.S. industries hurt by imports if he believes that such protection damages other parts of the economy.

The 60-40 vote on the plant-closing provision--a margin short of that needed to override a veto--was taken after a bitter daylong debate on what has emerged as one of the last major controversies in the 1,000-page trade package.

Industry Claims Victory

The proposal, pushed by organized labor but opposed by industries that otherwise back the omnibus legislation, had been substantially watered down from an earlier provision that would have made many more demands on employers. In fact, the final version was so weakened that the National Assn. of Manufacturers issued a statement claiming victory over the outcome.

In its final form, the provision, sponsored by Democratic Sens. Howard M. Metzenbaum of Ohio and Edward M. Kennedy of Massachusetts, requires the owners of any plant employing more than 100 workers to give them 60 days’ notice before closing it or imposing large-scale layoffs.

In earlier versions, the Kennedy-Metzenbaum proposal would have required up to six months’ notice, would have affected plants with as few as 50 workers and would have required employers to provide manager-worker consultations and substantial disclosure of company finances or face fines and other penalties.

Nevertheless, approval of the measure Thursday, even in its weakened form, marked a significant revival of a labor agenda that had been stalled in the Senate during six years of Republican control there.

“The American worker has waited 15 years for this day,” said Kennedy, chairman of the Senate Labor and Human Resources Committee. “This legislation is a matter of human decency, social justice and economic common sense.”

However, the Senate failed to follow its agenda on the issue of the President’s discretionary authority in import injury cases.

Currently, U.S. industries are eligible for tariff or quota protection if they can prove injury through unfair trade practices by other nations. The President now has discretionary authority to deny such protection.

Earlier in the week, senators sought to remove all of this discretionary power in a proposal stripping the President’s ability to deny import protection for any faltering U.S. industry that could prove it was injured by foreign competition.

Accepts Bradley Amendment

On Thursday, however, the Senate quickly accepted an amendment by Sen. Bill Bradley (D-N.J.) to withdraw this broad proposal. Under this amendment, the President will be able to exercise his discretionary authority if protecting an industry “would disproportionately burden” poor consumers--an argument used by Reagan two years ago in denying protection to the beleaguered U.S. shoe industry.

Another amendment, by Sen. Phil Gramm (R-Tex.), would allow Reagan to deny protection to an industry if such action disproportionately injured U.S. agriculture.

By withdrawing its broad discretion-stripping proposal approved earlier, the Senate averted a near-certain veto, which several Cabinet members warned would occur if it were contained in the final version of the legislation.

Restrictions on the President’s discretion in import injury cases are “wrong as a principle of government,” U.S. Trade Representative Clayton K. Yeutter told reporters at a breakfast meeting Wednesday. “In my judgment, there is no chance whatsoever of the President of the United States signing a bill that includes” the protection proposal.

But the Senate still faces a potential veto because of the plant-closing proposal approved Thursday. Labor Secretary William E. Brock III had warned senators Wednesday night that he could not recommend presidential approval of the bill if it contained the plant-closing provision.

Warn of Damage

The Administration, Senate Republicans and many economists had warned that the measure would damage the economy and eventually threaten to cause more layoffs.

In any event, the Senate bill will probably be substantially altered in a conference committee with the House, whose equally voluminous trade package also contains many provisions the Administration opposes as protectionist.

Meanwhile, a delegation from the European Economic Community, fearing the growing protectionist drift in Congress, fanned out across Washington on Thursday to meet with key congressmen, confer with Administration officials and hold a news conference.

European Community Vice President Frans Andriessen and Willy de Cler, commissioner for external relations, warned that increased U.S. protectionism would make it much more difficult for Europeans to correct trade policies opposed by Americans, especially subsidies for agricultural exports and the commercial airliner under development by the Airbus consortium.

Staff writer Michael Blumfield contributed to this story.