By: George Garneau
Convinced of losses, unions take pay cuts at Monterey Herald
WHEN E.W. SCRIPPS Co. took the Monterey, Calif., Herald as partial payment for the Pittsburgh Press, it gave up a strike-paralyzed big paper for a money-losing medium-sized paper?and took a different tack on labor.
To persuade the Herald’s unions to swallow steep concessions, Scripps opened the paper’s books, allowing a union auditor to confirm that the 35,000-circulation paper lost $1.9
million last year. Combined with $500,000 in advertiser cancellations this year, as California’s economy continues to falter, losses could have reached $2.4 million for the year.
Their skepticism disproved, locals of the Newspaper Guild, Graphic Communications International Union and Communications Workers of America overwhelmingly accepted 5.4% pay cuts and large health insurance premiums.
The concessions equaled those accepted by managers when Scripps took over from Blade Communications in January as part of an asset sale, which nullified existing union contracts.
The Guild, representing 170 white- collar workers in all departments, out of the paper’s 225 employees, voted 55-7 in March to ratify the givebacks as part of a three-year contract.
Bill Davis, executive officer of the San Jose Guild, said employees would never have swallowed the givebacks unless management proved the paper was losing money.
“There probably would have been a strike,” he said. “The key to the whole thing was their opening the books.”
He said the unions did not believe
it when Blade claimed during 1991 negotiations that the paper was losing money.
The contract runs through 1995, with wage reopeners in 1994. It reduces top minimum pay for reporters to $753 a week, from $796.
Under the defunct Blade contract, Guild pay would have risen to $840 a week in 1994.
Monthly health insurance premiums of $30 to $103 a month under Scripps’ less expensive corporate plan compare with no employee contributions under Blade.
Davis said the concessions by all three unions, including 30 press operators and printers, were worth about $1.5 million. The unions preserved the rest of their contract?job security, arbitration etc.?virtually intact, he said.
“We recognized for the future that it was important to get that paper into the black,” Davis said. “Our ability to recover the reduction will depend on how the paper does. So we indeed want a bigger share of the ad market.”
The Herald was valued at about $19 million as part of the transaction in which Scripps sold its dominant Press to its joint-operating partner, Blade’s Pittsburgh Post-Gazette, which closed the Press. The sale came eight months into a Teamsters strike that shut both papers. Teamsters walked out in May after Scripps began a distribution reorganization that would eliminate 450 of 600 Teamsters.
“I think Scripps learned something in Pittsburgh,” Davis said. “They had a profitable newspaper in Pittsburgh and went to war and lost.” In Monterey, the company bargained in good faith during talks he described as “very professional.”
Scripps spokesman Rich Boehne said the company released the results to the unions because they had already been disclosed in filings with the Securities and Exchange Commission as part of the transaction.
He said the Herald’s wage scales were among the highest in the area and employee costs consumed over 60% of revenue, “high by any measure.”