The New York Times Co. and the largest labor union at the Boston Globe came to terms early this morning, agreeing to substantial pay cuts and modifications to controversial lifetime employment guarantee provisions that had previously blocked progress.
Details weren’t released, but negotiators emerged from 10 hours of talks at around 3 a.m. to say that a tentative deal had been reached that would achieve the $10 million in cuts the Globe had asked the Newspaper Guild to make. The union represents about 700 Globe employees, including newsroom staff. The proposed agreement will be submitted to Guild membership for approval on Thursday. Until then, the terms are secret.
Although it’s hard to speculate about just what concessions the union agreed to, the timing indicates that the union buckled under intense pressure. The NYT Co. made its “last best offer” on Tuesday to the Newspaper Guild: a huge 23% pay cut. The union’s most recent proposal was for concessions amounting to about a 5% pay cut, along with changes to benefits plans. The fact that the two sides bridged the gap so quickly and that the union agreed to modify the lifetime employment guarantees indicates that the NYT Co. had the upper hand in negotiations. The Guild had repeatedly called negotiations over the guarantees “a nonstarter.”
This deal is going to hurt at the rank and file level. A $10 million cut spread across 700 employees amounts to about $15,000 per person. Assuming that the average Guild member makes about $100,000 a year in fully loaded compensation (wages and benefits), that nets out to a cut of about 15% per person. The union proposal had sought to concentrate those cuts in benefits programs paid to current and retired employees. Management, however, wanted to see wages slashed. Its message was clear: current and future employees of the Boston Globe shouldn’t expect to make nearly as much money as they have in the past.
Even with the $20 million in concessions the Globe‘s seven unions have made, there’s still a big gap in the math. The NYT Co. has said that the Globe is on track to lose $85 million this year, which means that the paper must cut another $65 million in expenses – or find a comparable amount in revenue – to break even. The gap between the necessary expense reductions and the relatively modest cuts agreed upon so far indicates that the Globe‘s problems are far from over.
This entry was posted on Wednesday, May 6th, 2009 at 6:50 am and is filed under Business News, NewMedia. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.