Unions reject concessions sought by Sun-Times buyer

Posted by Liz Webber on September 18, 2009 at 3:34 PM

Four newspaper unions have voted against the cuts and contract changes sought by a bidder for the Sun-Times Media Group this week. These include the flagship Chicago Sun-Times, as well as the Lake Country News-Sun, Pioneer Press and the Post Tribune of Northwest Indiana. James Tyree, the leader of the investors interested in purchasing the ailing newspaper group, urged unions to reconsider but asserted he would not give up on the deal before September 29.

Key concessions sought by the investor group, STMG Holdings LLC, include a continuation of a 15 percent wage cut for three years, an end to seniority rules, and the ability to transfer employees among the company's various locations. Tyree attests that his group's $25 million takeover bid will not be possible without the support of the unions on these measures.

STMG's interim CEO, Jeremy Halbreich, has met with workers to try to talk through their issues. The Associated Press reported that union representatives stressed they were not against the sale to Tyree's group, but they object to the severity of the cuts and the top-down manner in which they were delivered.

According to a statement from STMG Holdings, the goals of the investors should they buy the newspaper group would be to avoid liquidation at all costs while at the same time saving jobs and reversing the heavy losses of recent years. STMG is currently losing between $200,000 and $300,000 each week. The group also owes $608 million in back taxes and penalties, which could be a serious liability for the new owners.

The investor group also claims that since STMG filed for bankruptcy in April employees have already lost the rights to full severance pay and benefits.

STMG is not alone in its search to gain concessions from union groups. After drawn out negotiations last spring, The New York Times Co. secured $10 million in labor concessions at the Boston Globe, while the Minneapolis Star-Tribune recently confirmed $20 million in union cuts. La Presse, Canada's largest French-language newspaper, is seeking $11 million in concessions from its unions before a December 1 deadline otherwise the publication may face closure.

There are certain financial realities that newspapers must deal with if they hope to survive. At the same time, demands on employees must be reasonable in order for them to continue earning a decent living in a profession already somewhat notorious for meager salaries. Where does the compromise lie between these two sometimes opposing ideas?

Source: Chicago Sun-Times, Associated Press via Yahoo