Even at a bankrupt paper, selling a pay cut isn’t easy — especially in a union newsroom where some will lose 14 percent of their paychecks and others perhaps nothing at all.
Thursday, Newspaper Guild members will begin voting on a tentative deal struck late last week. The proposed contract saves ownership $1.6 million per year (not including pension reductions) toward the $30 million they say is required to emerge from bankruptcy.
We should have the rank-and-file’s verdict Friday. While a concessionary contract passed overwhelmingly last summer, everyone expects this vote to be closer. Many workers are finding their cuts in the high single digits, or worse, but beyond pay, the proposed deal has sharp edges that draw unequal blood.
To quell some anger, Guild leadership issued a detailed memo contrasting what the company’s initial demands with the negotiating results. Their point: Management’s proposals “were never intended to be equitable and our attempts to even the playing field were steadfastly resisted. Chapter 11 bankruptcy is not a level playing field.”
The stakes are high: Guild leaders are telling members if they don’t swallow the changes, Bankruptcy Judge Robert Drain could toss the contract entirely and impose more draconian terms. We’ll know in a couple of days whether the rank-and-file buys that.
Here are some memo excerpts, with a bit of commentary in italics:
Guild Tentative Agreement 4-27-09
… The Bargaining Committee recognizes that this agreement will be very painful — and more painful to some than others. The company’s initial proposals, as illustrated below, were never intended to be equitable and our attempts to even the playing field were steadfastly resisted. Chapter 11 bankruptcy is not a level playing field. Regardless, the Committee recommends approval of the tentative agreement. We base this recommendation not on any passion for the terms, but in the belief that the alternatives could in fact inflict more harm on members.
Term – Unchanged. Expires 7/31/11
What the company wanted: A wage reopener “in the event of future loss of revenue” and a wage freeze.
What resulted: Three percent across-the-board reduction. Wages frozen during remaining 26 months of contract.
[Why take a 3 percent cut over a freeze? Guild leadership was serious about evenly distributing pain. Obviously, stopping the wage reopener was a win, though as this deal shows, management can always ask for more. Owners would have less leverage if they emerge from bankruptcy, but companies go back into Chapter 11 all the time.]
Overscale (Merit pay)
What the company wanted: Adjust overscale pay at random.
What resulted: Thirty-percent across-the-board reduction. Company reserves $360,000 derived from overscale savings to redistribute to Guild members of its choosing.
[Most of the 275-person newsroom gets merit pay, and losses per worker cluster around $3,500. If management doled out their discretionary redistribution evenly, folks might get about $1,300 back. But of course, it won’t be even; some workers will get nothing, while others could see their merit pay completely restored and even get the 3 percent cut back.]
What the company wanted: Layoffs based on “business needs” without regard to seniority; expansion of job classifications from 13 to 25 categories.
What resulted: Expands list of job classifications from 13 to 18 for layoff purposes, with expansion solely in H-scale job titles, including separate categories for team leaders and department heads; copy desk chiefs; wire and web editors; photo editors; design director, assistant design directors, startribune.com design editor; and specialty editors.
[The more classifications, the easier it is to lay off specific people. Mid-level managers are in the Guild, and this clause allows top-level bosses to more easily target higher-cost editors in disfavored departments.]
Permits the company to exempt 20 percent in a layoff, up to a maximum of 12 exemptions a year. The 12 exemptions are not cumulative. For example, if a workforce reduction of 20 was announced, 4 employees could be exempted from the pool. If a second 20-person reduction occurred, the company could again designate them as exemptions, but not add to exemptions unless the layoffs were in different classifications.
[Very controversial; as noted before, this is the first time management has received the right to skip low-seniority workers. Management has a bit less flexibility than I indicated last week. Leadership’s point is that management shot for the moon and ended up with a lot less.]
Reclassification of management-selected H and K employees to A-scale
What the company wanted: Immediate reclassification (and pay cut). No appeals.
What resulted: About 40 H- and K-scalers ($1,481.75/wk) will be reclassified to lower A-scale ($1,344/wk). Just over a third are news page designers. All employees targeted for reclassification will have a 21-day period after Bankruptcy Court approval of agreement to appeal the proposed reclassification, but the outcome is not subject to the grievance and arbitration procedure. Reclassification wage reduction to occur in three phases during remaining 26 months of contract. Those reclassified not subject to 30 percent overscale reduction and, if receiving night differential, not subject to 3-percent wage reduction.
[These are the workers that could lose up to a seventh of their paychecks. Many designers bitterly complain they have decision-making roles on the highest-profile pages — deciding story placement, headlines, deadlines — yet are being reclassified en masse. The appeals process isn’t compelling: Management will make decisions unilaterally, which isn’t very union-like.]
What the company wanted: Eliminate minimum severance.
What resulted: Current employees retain severance at 1.5 weeks of pay for every year of service up to a maximum of 30 weeks through remaining 26 months of contract; severance reduced afterward to 1 week’s pay for every year of service up to a maximum of 26 weeks, with a 4-week minimum. New employees start at new formula.
[Anyone who didn’t take one of the many previous buyout rounds had to know this was coming, and reasonably expected worse. The agreement at least means in the event of job reductions, management will have to spend money to save money.]
What the company wanted: Freeze defined benefit plan and cash balance immediately.
What resulted: Guild Plan G frozen at a set date after Aug. 2, 2009 to permit an additional contribution (worth about $2,000) to the cash balance accounts of members.
401(K) – Guild will join Publisher 401(K) plan, effective with freeze of Plan G, and receive contribution if and when restored
Profit Sharing – Will participate in Guild-initiated company profit sharing in cash disbursement at 10 percent over cash flow above $5 million.
[Double digit profits? Don’t hold your breath.]
Furlough – Each member required to take two days of unpaid leave in 2009 and 2010.
[Not as bad as at the non-bankrupt Pioneer Press, but another $500-plus annual pay cut for most employees.]
What the company wanted: Eliminate night differential immediately.
What resulted: Night differential sunsets in three phases during remaining 26 months of contract.
[Super-controversial; many former workers have taken buyouts rather than be moved to nights. Now, a $3,500 or so spiff is gone, making reassignment that much more miserable. Meritorious night workers who aren’t reclassified get the triple-whammy: the across-the-board cut, the overscale cut, and this.]
Shift differential – Eliminated.
What the company wanted: Overtime eliminated for team leaders and those in the “creative class,” including columnists, Capitol bureau reporters, editorial cartoonist, editorial writers, and investigative and projects reporters.
What resulted: Eliminates daily overtime so overtime paid only after 40 hours worked per week.
Niche Products – Establishes new scale for new, unspecified, niche products, max at A-3 ($949.50) for reporters, copy editors, photographers and artists and A-4 ($1,067.50) for editors. Niche employees can only contribute to the daily newspaper on an “occasional and irregular basis;” current employees transferred to niche will retain current wage scale; niche employees transferred to daily newspaper will move up one level on wage scale and progress to top scale.
[These are roughly $50,000-$55,000-a-year jobs if the Strib creates new publications.]
What the company wanted: Unlimited freelance
What resulted: High school sports coverage generated by stringers not exceeding 250 words per story, and not to exceed 500 articles a year. Community news coverage generated by stringers that does not exceed 500 words and is published only in zoned news sections and not to exceed 1,000 articles a year. Includes a clause that the community news freelance is supplemental and not intended displace Guild work. Travel articles not to exceed 75 articles a year. All other types of freelance work (Article XXIV, 1-J in contract booklet) from 360 stories to 600.
[Not as big a change as expected. The byline jump from 360 to 600 is a lot (it was also boosted in the last contract) but it’s concentrated in high-school and zoned weekly coverage, rather than high-profile stories. This could free up reporters to do more of the latter.]
The Breakdown in Annual Savings:
Wage freeze: $313,000
3 percent scale cut: $570,000
Furlough (2 days per year): $158,000
30 percent cut in overscale: $533,100
Night differential: $100,000
Reclassification H/K scale: $89,333
Shift differential: $72,000
Payroll taxes: $142,000
(Management will retain $360,000 of this to disperse to members of its choosing.)
ADJUSTED SAVINGS TOTAL: $1,637,433 (1st Year)