Toledo 'Blade' Contemplating Cutbacks in Benefits Amid Fund Shortfall

By: Joe Strupp Unionized employees at The Blade of Toledo, Ohio - including more than 200 who have been locked out for the past month or so -- could see their health and retirement benefits reduced or suspended as the paper seeks to address a shortfall in the fund that pays for those benefits.

"There will have to be some changes or we will be digging a bigger hole," said Luann Sharp, managing editor and a Blade spokesperson. "At this point....we can't pay our bills if the situation stays as it is."

Sharp is referring to the paper's Health and Welfare Trustee Board, a joint management/union group comprised of three members from management and three from the paper's eight unions. The group oversees policies surrounding which benefits are provided to unionized employees and the fund from which payments for those benefits are taken.

The trustee board oversees funding for all union benefits, including health, dental, vision, prescription drugs, life insurance, death benefits, and retirement benefits. Sharp had been among the three management board members, but she resigned today citing a possible conflict as company spokeswoman.

The benefit funds are comprised of contributions from both employees and management, which are determined during bargaining, not by the trustee board. The board is set to have a special meeting this afternoon to address a shortfall that has occurred monthly since July 1 when benefit costs increased 10%.

"We have borrowed money from our reserve to cover the cost each month," Sharp said, noting as much as $40,000 has been needed in some months. "The trustees can only spend the money they have."

Larry Vellequette, spokesman for The Toledo Council of Newspaper Unions and one of the three union representatives on the board, said the fund is not in the crisis state that Sharp contends. He says the reserve has $1.4 million and could continue to shore up the costs for years ahead. "This is very premature," said Vellequette. "It is a pressure tactic. I think this is all about pressuring the guild."

Sharp said benefit changes could range from cutting retirement death benefits for families of former workers to increasing benefit contributions to any combination. "We may need to suspend some benefits until the cash flow improves," Sharp said, adding that any changes could take effect as early as next month. "Those are some of the options available."

The potential benefit changes are coming as all but one of the paper's eight unions continue to work without a contract after their last agreements ended in March. Five of those bargaining units have been locked out for at least a month, a situation that means none of them are making payroll benefit contributions to the fund.

The Toledo Newspaper Guild, the paper's largest union with some 350 employees, remains on the job, but without a new contract. Sharp said the uncertainty over what the guild's future contract will include and its benefit provisions is among the issues driving a possible benefit structure change.

"What if the guild had a strike and there was no money coming in to cover them? Or if there was a [guild] lockout?" she said. "You have to ask if we could pay our bills in that worse-case scenario. The answer is we can't."

Vellequette disagreed, saying "I think that's crap."

For any change to the benefit plans to be implemented, it must receive approval from the majority of the trustees, which would include both union and management members. Sharp said a third-party could be brought in to help make decisions, but today's meeting is not scheduled to include one.