A tentative contract settlement has been made between the Boston Newspaper Guild and the Boston Globe's parent company, the New York Times Co. Statements released last night after the agreement was reached at about 11pm ET announced that employees had agreed to significant cuts in wages and benefits which would allow the company to achieve $10 million in cost savings.

The tentative agreement includes a 5.94% salary reduction, modifications to contract language on job security and other concessions, said the Boston Newspaper Guild's statement. It also announced that the guild has "negotiated steps to help limit the financial hardship imposed on guild members from the temporary implementation of a 23 percent pay cut." This wage cut will remain until the agreement is ratified by a vote on July 20, after which employees will receive a lump sum payment amounting to partial compensation for lost wages, if the deal is approved.

The Boston Globe management's statement said that the paper was "pleased" to have reached such a tentative agreement, quoting publisher Steve Ainsley who commented that "Our aim throughout our negotiations has been to achieve the necessary savings in a way that causes the least hardship for our employees." As well as costs saved, lifetime job guarantees covering about 190 guild members were also eliminated.

In April the NYT Co threatened to close the Boston Globe if it could not achieve $20 million in savings. Negotiations started with the various unions and deals were made with all but the largest, the Boston Newspaper Guild, which narrowly rejected a package that included a 10.3% total wage reduction, prompting the company to respond with a unilateral 23% pay cut. One of the main complaints from guild members was that they did not think that management was equally sharing the burden; it is not yet clear whether management pay cuts have been renegotiated. The chances that the deal will be approved are likely to be better this time, due to the smaller pay cut and the wish to avoid the continuation of the 23% reduction.

The Times Company is reportedly looking to sell the paper, and several interested investors have emerged. Resolving the union dispute and achieving wage and other concessions, such as the elimination of life time job guarantees, would probably make the paper more appealing to a buyer. Much speculation has arisen on what would happen to the paper if it were sold.

Source: New York Times, Poynter