Tough Beans: Boston Globe Union Calls Bluff, Rejects NYT's Demands

The union that represents the Boston Globe's journalists rejected the demands of the paper's owner, the New York Times Co., for concessions including a wage cut of 8.3%, five days of unpaid furlough per employee, and benefit reductions affecting health care, 401(k)s and pensions. The deal would also have ended guarantees of lifetime employment for 190 newsroom workers out of a total 690. The package of concessions, worth $10 million, was the result of an initial agreement between union negotiators and the company, which the union leaders then put to a vote. The no vote by the Newspaper Guild, by a narrow margin of 277-265, is effectively calling the "bluff" of NYTCO management, which has threatened to close the newspaper - although it remains to be seen if they were really bluffing.

NYTCO first warned in April that it might have to close the Boston Globe unless it secured a total $20 million worth of concessions from a number of unions representing production, distribution, and newsroom employees; management says it needs to do this to offset a projected loss of $85 million in 2009. After the failure of the latest round of negotiations, NYTCO said they were reverting to their "alternative Final Record Proposal," immediately implementing an across-the-board wage cut of 23% - but they could still shut down the newspaper if things get much worse.

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Skeptics in various Boston Globe unions have said the newspaper still has too much intrinsic value as a media business and brand for NYTCO to actually shut it down; some have even suggested the costs of the shutdown itself might exceed the company's much-diminished cash supply. Newsroom workers also expressed resentment about inflated pay for corporate managers.

On the other hand, things have been getting worse for a while: from the first quarter of 2007 to the first quarter of 2008, the company saw year-over-year quarterly revenue declines of 4.9%, 6%, 8.9%, 10.8%, and 18.6%. It has trimmed a considerable number of positions as well, from a decade high of 13,800 in 2000 to about 9,250 currently, a 33% reduction. By resorting to unpaid furloughs, NYTCO management may be hinting it feels it has now cut staff to the bone, beyond which it will become difficult to carry on minimum operations; but this also means that closing properties is the next logical step.

The closing of the Boston Globe will become more plausible if revenue declines continue to accelerate, and advertiser demand is seriously depressed during a prolonged economic downturn. Even a timely economic recovery might not save the newspaper, as the medium (or at least the big metro dailies) is also suffering a long-term secular decline to Internet competition.

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