Journal Register Looks to Void Union Contracts

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Newspaper publisher Journal Register Co. has asked a bankruptcy court’s permission to terminate five contracts with unions representing workers at two Detroit-area publications.

The Yardley-based company, which filed for Chapter 11 reorganization in February, made the request Tuesday in U.S. Bankruptcy Court in Manhattan after it couldn’t reach agreements with the unions of its Independent Newspapers Inc. subsidiary covering pressmen, drivers, journalists, typographers and mailers at the Macomb Daily and Royal Oak Tribune.

Journal Register wants to stop contributions to certain employee pension plans and said the union contracts resulted in higher labor costs. The company, like many newspaper publishers, is grappling with a slump in advertising and migration of readers to the Internet.

The bankruptcy court request comes as the company failed to reach an agreement with the unions in contract talks. Journal Register said it at first sought 15 percent in salary cuts with no scheduled raises, which will help it save $3.1 million a year.

The unions have rejected the offer and a second proposal from the company. Journal Register said its final offer was for a 12.5 percent salary cut, which would save the company $2.85 million a year if non-union wage cuts are included. It said the unions refused to agree to the proposal and has not put forward a counter offer.

The company said revenue fell nearly 11 percent last year and earnings before interest, taxes, depreciation and amortization plunging by 33 percent. In the first quarter, revenue fell by 20.6 percent and profit was down 75 percent.

Journal Register said it has already closed or sold publications, laid off 30 percent of its workforce and ended certain non-union employee benefit programs.

Journal Register owns 20 dailies — including the New Haven Register in Connecticut — and 159 other publications that cluster in the greater Philadelphia area, Michigan, Connecticut, greater Cleveland area and parts of New York.

Messages left with the company after business hours Wednesday weren’t immediately returned.

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