By Russell Adams
Of THE WALL STREET JOURNAL
Unions representing Boston Globe employees continued to negotiate with the newspaper's management well past midnight Sunday, the deadline to agree to concessions to cut the paper's losses and avoid its closure.
Less than three hours before the deadline, the Boston Globe's largest union said it had presented a proposal to management that cuts costs by more than what is necessary to avoid closing the newspaper. The Globe, which is owned by New York Times Co. (NYT), said it had told its unions it is prepared to file notice on Monday under the Workers Adjustment and Retraining Notification Act, which requires 60 days' advance notice before closure of a business. Management's statement, issued shortly after the union's, suggests the two sides might not be as close to an agreement as union leaders had indicated.
(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)
Early last month, Times Co. told union leaders that the Globe was on pace to lose $85 million this year and that it couldn't continue to operate the paper without significant cost reductions. It gave the unions 30 days to agree to $20 million in concessions to keep the company from shutting down the unprofitable paper, New England's largest daily. The original deadline was Friday, but shortly after midnight Friday management said it had extended the deadline by two days because of progress in negotiations.
Times Co. is seeking $10 million in cuts from the Boston Newspaper Guild, which represents more than 600 editorial, advertising and business employees, and the balance from several smaller unions representing Globe workers. Among the options for achieving the savings are a pay cut, the end of retirement plan contributions and lifetime job guarantees, lower contributions to health-care plans, a longer work day and lower severance pay.
While negotiations with the paper's smaller unions have been relatively productive, the Guild, representing such a large and diverse group, has had to overcome deeper divisions. Still, most Guild members felt something would be worked out to avoid closure, according to Globe employees, and an email Thursday from Globe publisher Steven Ainsley lifted their hopes.
"By all accounts the talks have been substantive," Ainsley wrote, adding that he thinks "we'll emerge from this difficult period in better shape than when we entered it."
On Sunday night, the Guild said that after "arduous deliberations" it had exceeded management's demands for $10 million in cuts. "These tremendous sacrifices, across virtually all categories of compensation and benefits, are more than adequate to continue The Boston Globe's mission of quality journalism," the Guild said in its statement.
Management said in its statement that "filing the [Workers Adjustment and Retraining Notification] notice is a difficult step that we would like to avoid but, unfortunately, given the state of the negotiations, it is one we must be prepared to take if negotiations are not successful."
The extension of the Friday deadline came on the heels of a discovery that unexpectedly widened the gap between management and the Guild, according to people familiar with the discussions. Late Wednesday night, the Guild learned that $4.5 million of $14 million that management had presented in potential give-backs had already been taken off the books in a previous round of cuts. That meant the Guild might have to make larger-than-expected sacrifices to meet management's demands. In response, Guild leaders called on New York Times Co. to extend the deadline.
Times Co.'s efforts to trim losses at the Globe come at a tough time for the New York publisher, which has had to make a string of difficult moves to address the industry's plunging advertising revenue and to manage the company's debt. Times Co. borrowed $250 million from Mexican telecom billionaire Carlos Slim, sold a portion of its headquarters building and suspended its dividend.
In March, the company laid off 100 employees in its business operations and imposed a pay cut on all nonunion employees at the Times and Globe that went into effect in April. The company also asked for similar wage reductions from the Times's unionized employees, who are expected to vote on the pay cut this week.
-By Russell Adams, The Wall Street Journal; 212-416-4440; russell.adams@wsj.com
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May 04, 2009 07:48 ET (11:48 GMT) | 
