Now that President Reagan finally has vetoed the controversial new trade bill, Congress must make an important decision.

Since the Senate is not expected to override the veto, the decision basically involves what this nation's lawmakers want more: a new trade law or a new campaign issue.If Congress has enough statesmanship to put long-range economic gain ahead of short-sighted politics, it will remove the provision on plant closings that drew most of the White House's fire and re-pass the trade bill.

What's wrong with this provision? It would require businesses with 100 or more workers to give 60 days' notice before shutting down facilities or laying off 50 or more workers. Isn't such a requirement no more than simple justice? Plenty of firms give advance notice voluntarily. Polls shows that 86 percent of the public favors even more advance notice, up to three months.

Up to a point, this stance makes sense. Whenever possible and appropriate, advance notice before plant closings and layoffs amounts to simple courtesy and can help a firm with the public relations problems brought on by the closings and layoffs.

But the fact remains that advance notice is not always appropriate. For example, what chance would an ailing firm have of selling off its truck fleet at a good price if potential buyers knew the company was about to close? Advance notice could mean the difference between a financially troubled business and a bankrupt former business.

View Comments

Faced with the prospect of costly lawsuits over plant closings, firms might understandably start putting profits into legal defense funds instead of using the money to hire new workers or otherwise revamp company operations.

Moreover, a struggling firm may not always be sure what's likely to happen in the next six days, let alone the next 60 days. Efforts to refinance debt, sell off assets, secure a major new contract, attract new investment capital, or merge with another company often go to the deadline.

No wonder a study by Robert R. Nathan Associates concluded that the plant closing provision would result in more than $1.8 billion a year in extra costs to employers. No wonder the same study also concluded that 460,000 fewer workers would have been added to the payrolls of U.S. firms if the provision had been in effect since 1982.

In short, the purpose of the trade bill is to make American business more competitive. The plant closing provision, however, would make U.S. firms less competitive. It never belonged in the trade bill and ought to be removed so the two issues can be considered separately on their own merits.

Join the Conversation
Looking for comments?
Find comments in their new home! Click the buttons at the top or within the article to view them — or use the button below for quick access.