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Economy & Business

Newspaper Guild averts showdown, accepts pay and benefit cuts at Post-Dispatch

This article first appeared in the St. Louis Beacon, March 27, 2010 - St. Louis Newspaper Guild members on Saturday voted for the "last, best" contract proposal from Lee Enterprises by a majority of 132-54. The vote means St. Louis Post-Dispatch guild employees will accept a 6 percent pay cut for the next five years, lose retiree health care and life insurance and see the freezing of their pensions.

Though members voted by a majority to accept the contract, the mood inside the downtown Holiday Inn was resigned, said Jeff Gordon, president of the St. Louis Newspaper Guild and a sports columnist at the Post-Dispatch.

“It was a pretty spirited discussion and there was quite a bit of resistance for the offer, as you can expect,” Gordon said shortly after the vote. “But in the end the risk of damaging our business through a corporate campaign and making things worse outweighed what we might have gained from some sort of a revised offer from the company.”

Negotiations for the new contract have been what Gordon has described as hard-bargaining since June 2009, when the previous contract expired.

Since Lee purchased the Post-Dispatch in 2005, newspaper companies in general have been in an economic tailspin; many, including the Post-Dispatch, have experienced numerous rounds of buyouts, layoffs and unpaid furloughs.

“What has been a long and difficult process for everyone has come to an end,” said Post-Dispatch Publisher Kevin Mowbray, in a statement. “Now is the time to move forward and capitalize on our strengths to grow our business for the future. I sincerely thank both negotiating teams and all those involved for their hard work and dedication during the bargaining process.”

Had members rejected the offer, Lee could have imposed the contract, enacted further layoffs and severely weakened the union. The guild was prepared for a $500,000 corporate campaign if that happened, asking advertisers and readers to leave the paper. If that had been successful, it could have hurt the paper in many ways.

“If we’d done a great job campaigning against the company, we might have slit our own throats,” Gordon said.

Barry Gilbert, a guild board member and features desk copy editor, was disappointed after the vote.

“I thought that even if it passed, it would have been a lot closer. I’m very disappointed that people don’t realize that you can’t appease a tyrant,” he said. “And Lee has been hostile to the union since the day they got here.”

The contract is a 5 1/2 year agreement, beginning in April. Gordon says the guild will use its presence in the workplace to help members through a difficult time in both the economy and the industry that includes fewer employees and more work.

“We hope Lee starts generating more revenue, our hope is that we get through this financial crisis that we’re in right now and we see better times.”

Virginia Gilbert, Barry Gilbert’s wife and a Post-Dispatch retiree, is the chair of a new organization, Post-Dispatch Retirees United. That group is fighting Lee over health insurance, which Lee has taken away from some retirees. Her group will go back to fighting its own legal battles and see what happens next for everyone involved.

“We’ll see,” Virginia Gilbert she said. “Maybe Lee will turn out to have more integrity that I expected. I hope.”

Her husband isn’t so hopeful.

“This time they came after retiree medical,” Barry Gilbert said. “Five years from now they’ll probably come after the pension. There’s no end to it unless you fight them.”

St. Louis Newspaper Guild members on Saturday afternoon approved the "last, best" contract offer from Lee Enterprises by a majority of 132-54. The vote means St. Louis Post-Dispatch employees will accept a 6 percent pay cut for the next five years, lose retiree health care and life insurance and see the freezing of their pensions. Riding on Saturday's vote was the viability of the guild and the health of the paper.

Earlier story: With little to gain, lots to lose, Newspaper Guild prepares to vote on contract

On Saturday, members of the St. Louis Newspaper Guild will vote to approve a contract or turn it down.

Either way, things are about to change at the St. Louis Post-Dispatch. Riding on Saturday's vote are both the viability of the guild and the health of the paper.

If the contract is rejected, Lee Enterprises, which owns the Post-Dispatch, could impose terms that include even more draconian cuts and concessions. The guild is prepared to fight back by asking readers to suspend their subscriptions -- a move that could further harm the paper.

If the contract is accepted, the guild members face a 6 percent pay cut, furloughs, the elimination of future retirees' medical benefits and the freezing of pensions, among other issues -- and no guarantee that their sacrifices will restore the paper's journalistic stature or economic well-being.

"I don't know that war's inevitable," says Jeff Gordon, president of the St. Louis Newspaper Guild and a sports columnist at the Post-Dispatch. "But it would appear likely if the members turn it down."

Regardless of how the vote goes, Post-Dispatch retiree Virginia Gilbert thinks it's a lose-lose situation.

"One of the executives of Lee at the Post Dispatch accused the union, if they turned this down, of murder-suicide, and I think that's where we're headed," says Gilbert, whose husband, Barry Gilbert, is on the guild's executive board. "It's just a question of who's doing the murder and who's doing the suicide."

LEE VS. THE GUILD

Management at the Post-Dispatch wouldn't comment before the vote. Negotiations on the contract have gone on since June 2009, when the last contract expired. Those negotiations included a federal mediator, Gordon says.

* Elimination of retiree medical care, life insurance, freezing pensions

The elimination of the retiree medical care is for people currently working at the paper, Gordon says.

"So what's in there's in there, and what we have coming now is what we're gonna get." What will happen to previous retirees is not yet clear.

* Six percent pay cut, continued furloughs

Gordon says he doesn't know the bottom line figure, but thinks the total dollar amount is around $18 million to help the company get through the difficult economy.

*No layoffs for six months

"That's a positive and I think we're in a situation where layoffs are always possible at the Post-Dispatch," Gordon says.

Gordon characterizes the negotiations as hard-bargaining, saying Lee's original demands were severe and included a 23 percent reduction in pay over three years and no possibility for recovering that lost income.

"We can say we never did get to an agreement, but the company has presented this as their last, best and final offer. We will take it to the membership this Saturday and see if they accept it."

The biggest issue is the 6 percent pay cut, Gordon says. That 6 percent would continue over the next five years, but it's not cumulative, he says, rather a one-time reduction that would stay in place for the first three years of the contract and be reduced by 2.5 percent in 2013, 2014 and 2015 if the company began turning a profit.

"It's just a one-time 6 percent reduction of our pay scales," Gordon says. "They had originally sought three cuts totaling 23 percent in their initial demands."

THE MEMBERS

While the St. Louis Newspaper Guild has about 250 members, Gordon expects about 150 at Saturday's vote.

It's hard to predict how they will vote, he says. On Thursday, as members stopped by to pick up the contract to look over before the vote, Gordon says he heard a mixed response.

"Some people will vote for it because they believe that there may not be a whole lot to get from the company and a fight could make the situation worse; and other people are pretty determined to fight, take their chances, thinking how much worse could it be."

The Guild is staying neutral. "We have no recommendation," Gordon says. "We just present the information."

The offer is a difficult one to accept, he says, but rejecting it could lead to a new battle that could cost the company, the paper and the union.

"The company's got some rights here," Gordon says. "If we reject the offer, the company can impose the contract. If they do that, in addition to imposing what it wants to impose on the contract, it can also greatly reduce our workplace rights."

The possibilities might include eliminating arbitration for disciplinary cases, imposing work rules, making union membership optional and imposing layoffs to gain leverage or in anticipation of the battle ahead. Essentially, the company could eviscerate the union.

A SEVERE RISK

If the guild turns the offer down, and if Lee follows through on the points above, then the guild has what Gordon calls an aggressive corporate campaign ready to launch, with $500,000 already set aside initially and more expected from the national union, the Communication Workers of America.

"We can then ask people to suspend their subscriptions, we can go to advertisers and ask them to demand that the company settle this situation," he says.

If the standoff continues, Gordon anticipates Lee will lose money from both advertisers and readers.

"Is that really the set of effects you want to have?" asks Rick Edmonds, a media business analyst with the Poynter Institute in St. Petersburg, Fl.

Edmonds hasn't followed the Post-Dispatch case specifically and has no leanings either way, he says. But he notes that advertising revenue has continued to plummet for daily newspapers, which leads to job cuts and fewer reporters doing more work and a thinner paper.

If the guild launches its corporate campaign and is successful in deterring readers and advertisers, will those people ever come back?

With the smaller size of the paper and fewer ads, even loyal readers might not need much to jump ship, Edmonds says.

"That is a very severe risk. We understand that," Gordon says. "Generally speaking, we want Lee to succeed in St. Louis. We want the Post-Dispatch to succeed. We want as many people to read as possible and we want as much advertising."

The only reason for a corporate campaign is if the guild feels pushed to an extreme, he says. "We're baffled as to why the company would want to provoke such a fight."

Edmonds estimates that right now, about a quarter to a third of newspapers are unionized. Some unions have been weakened, and there's been no growth.

Gordon believes it's in the union's best interest to keep the power they have.

"We've seen other local unions really suffer erosion of basic rights through these crises," Gordon says. "And we would like to maintain those (rights) and maintain strong so that when and if the industry recovers, we're still in a very good position to fight for our members."

RETIREES UNITED

It won't just be management and guild members paying attention to Saturday's vote. Retirees from the Post-Dispatch are also watching for reasons of their own.

In 2004, after 27 years at the Post-Dispatch, Virginia Gilbert retired.

"I took early retirement to get health insurance, paid medical coverage, which according to the contract, I was supposed to get for life."

She also took a 50 percent cut in her pension for the rest of her life in exchange for that health insurance.

Like Gilbert, people who retired from the paper between 1994 and 2004 had their benefits cut by Lee. The guild is unsure what Lee will do with guild retirees from 2004 to the present. A few cases are currently in litigation after Lee stopped paying for health insurance.

Then, last month, Post-Dispatch Retirees United formed.

So far, according to Joan Haven, a retiree and the group's vice-chair, the group's e-mail list has 138 people and they're adding more daily.

"We have a two-pronged approach at this point," says Gilbert, the group's chair. "No. 1 is to conduct our own corporate campaign letting people know, including shareholders of Lee, what the company is trying to do to us already, and we are joining in sympathy with the active employees."

Gordon says the guild is pulling for the new group.

"This could be a very powerful entity in the community because these people built the paper and are constituents of the ones who are the most intense readers of the paper," he says. "We're encouraging them to fight for the paper and fight for their own rights."

Retirees are not considered active members and therefore won't be voting on Saturday, but regardless of how that vote goes, Gilbert thinks Lee has an agenda that it will achieve either way.

"Lee is trying to kill the union," she says. "This proposal, if it's voted down, Lee will try to kill it quickly; if it's approved, Lee will try to kill it slowly."

Civic contribution

Throughout her career, Pam Johnson the executive director of the Donald W. Reynolds Journalism Institute at the University of Missouri-Columbia, has believed that communities are better for having newspapers.

"Having been an editor of newspapers for many years, I have always believed the newspaper is a crucial institution in a community, big or small, and that the newspaper is important to every citizen who cares about the community and tries to keep up with what's going on. But it's also an institution that stands broadside with all of the other larger institutions in a community."

And she still believes that.

And while it's been a difficult few years for newspapers, she says, papers like the Post-Dispatch still play a significant role.

"I can see both sides," Johnson says, "and that the citizen is the one that gets hurt by not having the resources given to the coverage, but you certainly don't want to lose a significant institution that has a lot it can still bring to the community even under these circumstances."

"I hope that both sides try to work this through," she says. "It's just so harmful." 

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