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Globe, Guild reach new pact

Recast proposal awaits union vote

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By Robert Gavin
Globe Staff / June 24, 2009
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The Boston Globe and its largest union reached a tentative agreement last night on $10 million in wage and benefit cuts, following three months of bitter labor talks that threatened to close the 137-year-old paper.

The deal - which, if ratified, could make the paper more attractive for buyers - differs in only a few areas from the package that union members voted down on June 8.

It provides a smaller pay cut - 5.9 percent - in exchange for deeper benefit reductions. But the main concessions originally demanded by The New York Times Co., the Globe’s owner, remain in place: $10 million in total savings, elimination of lifetime job guarantees for about 170 veteran Boston Newspaper Guild employees, and freezing the pension plan.

“Our aim throughout our negotiations has been to achieve the necessary savings in a way that causes the least hardship for our employees,’’ said Globe publisher P. Steven Ainsley in a statement. “We’re very pleased to have reached an agreement that accomplishes those goals.’’

Said union president Daniel Totten: “It’s been an exhausting process and a very difficult process for the members.’’

The agreement still needs to be approved by nearly 700 editorial, advertising, and business office employees. A vote has been set for July 20, and approval seems probable because, unlike the earlier offer, union leaders agreed to recommend it. The first offer failed by 12 votes out of more than 500 cast.

Beth Daley, a Globe reporter who voted no on the initial offer, said she expects the new agreement to be ratified. Guild leaders will present the details of the offer to members tonight.

“Although I can’t speak for everyone, I think this deal will pass. Everyone wants this over,’’ said Daley, who is waiting for details to make up her mind. “I remain incensed at management for the punitive nature of their deal, but I hope this will signal to potential buyers that the union is willing to make sacrifices to position the paper to face the challenges ahead and continue informing the public.’’

The Guild agreement ends a tumultuous period of tense bargaining in which the survival of the Globe was at stake. In early April, the Times Co. threatened to fold the paper unless it could gain a total of $20 million from Globe unions.

The Guild would be the last major union to agree to the concessions. Unions representing press operators, mailers, and delivery truck drivers, as well as several smaller unions, already have ratified wage and benefit cuts totaling about $10 million.

Even though the Times Co. has withdrawn its threat to close the paper, the Globe’s future remains unclear. The company projected that the Globe would lose $85 million this year without significant savings. Globe management has undertaken several measures to close the gap, including shutting the paper’s Billerica printing plant and imposing about $8 million in cuts to nonunion managers’ salary, bonuses, and benefits.

The Globe has also increased subscription and newsstand prices and launched initiatives to boost online advertising.

As with most newspapers, however, the underlying problem - the migration of readers to the Internet - hasn’t been solved.

The Guild agreement “is good for the short term, and possibly the long term,’’ said Stephen Burgard, director of the Northeastern University School of Journalism. “But it still doesn’t remove the onus of coming up with an economic model that makes the paper viable.’’

Adding to the uncertainty is news that the Times Co. is seeking a possible sale of the paper it bought for $1.1 billion in 1993. The Globe has reported that potential bidders include Stephen Pagliuca, a private equity executive and Celtics co-owner; Jack Connors, cofounder of a major advertising firm and chairman of Partners HealthCare; and Stephen Taylor, a former Globe executive and member of the family that sold it to the Times Co.

The Guild agreement should make the paper more attractive for a sale by ending labor unrest, lowering operating costs, and providing more flexibility to reduce staff through scuttling the lifetime job guarantees, said Rick Edmonds, media business analyst at the Poynter Institute.

“For a buyer, the lifetime job guarantees are something you would like to see out of the picture,’’ Edmonds said. “Getting an agreement puts everything on a much more even keel.’’

A little more than two weeks ago, the Guild narrowly rejected a similar package of concessions, and 10 days ago the company, in response, imposed a 23 percent wage cut on union members. The new deal addresses a key reason Guild members rejected the first contract offer: the size of the wage cuts. The proposal lowers the pay cut to 5.9 percent from the earlier 8.4 percent by making additional benefit reductions, which were not disclosed.

Under the current contract, Globe reporters earn from about $40,000 to a little over $70,000 depending on experience, with many making top scale.

The proposed pact still includes five days of unpaid furlough, which would increase the total salary loss to about 8 percent compared with about 10 percent in the rejected offer.

Guild employees, however, will have to live with the 23 percent pay cut for nearly a month while the deal awaits ratification.

If the contract is ratified, the company, under the agreement, would pay Guild employees most of the difference between the imposed 23 percent pay cut and the smaller negotiated one. To cover the cost, the company would make a one-time cut to its union healthcare contributions. That could mean higher premiums for Guild members.

Robert Gavin can be reached at rgavin@globe.com.