Updated from 10:21 a.m. EDT
New York Times'
threats were anything more than a scare tactic, the
may have moved a step closer to the end of its 137-year life.
On Monday evening, the
biggest labor union voted to call its parent company's bluff by rejecting pay cuts and other concessions that the paper's owner, the
New York Times
, had indicated were necessary for its survival. The margin for the naysayers was a slim 12, with 277 voting no to the proposed contract and 265 voting yes.
The union in question, the Boston Globe Newspaper Guild, represents mostly reporters, editors and business-side administrators and ad salespeople. The
other six unions -- for pressmen, delivery truck drivers and mailers, among other groups -- had already agreed to concessions.
But these cuts were a bitter pill, and had come to epitomize the life-threatening problems -- and subsequent tough choices -- facing the newspaper business today.
, which acquired the
16 years ago for a then-whopping $1.1 billion, had said that it needed $20 million worth of savings to come out of the
union contracts in order to keep the paper -- New England's largest daily -- in business, with half that amount coming from the Newspaper Guild.
The proposed contract would have cut employee pay by 8.4% a year, instituted a mandatory five-day unpaid furlough (which amounts to another 1.9% in salary reductions), and suspended contributions to retirement plans.
bosses in New York have made a very public point recently of saying that closure of the Boston daily has always remained on the table. But the cost of shutting the paper down would be high, both financially and politically, and many have questioned the
wherewithal to follow through on the threat.
Closure aside, the more immediate repercussions of the Guild's rejection is a 23% pay cut for its member employees. In a statement released Monday night, Globe management said it would introduce the cuts next week. "We regret this action," the statement read, "but have no financially viable alternative."
Catherine Mathis, a spokeswoman for the
said, "What we needed to do was get those cost reductions, and with the 23% cut we've achieved that."
The Guild has previously said that it would challenge the legality of the 23% reduction on the grounds that it is being made unilaterally.
The union -- and presumably many of those members who voted nay -- expect negotiations with management start up again, despite fairly pronounced indications from
bosses that the jib is up. The financial situation is so dire, they say, that no further time can be spent on talks.
problems are legion, though how much of that is the wretched business climate for newspapers in general, and how much might be attributed to mismanagement by the
, remains unclear.
has said that it expects the
to lose $85 million in 2009. In 2008, it lost $50 million, according to the
financial statements, a heavy burden to bear for the parent, which posted an overall loss in 2008 of about $41 million -- meaning that the
played a large role (if not
role) in dragging the debt-weighted
into the red last year.
The guild's members grew increasingly irate as the vote approached, saying that their concessions haven't been on par with those in the
executive classes, most of whom have taken a temporary 5% pay cut. (The
pay cuts would be permanent.) The head of the Boston Newspaper Guild, Daniel Totten, has also criticized
bosses for receiving bonuses in February.
Shares of the
New York Times
cllosed slightly lower Tuesday afternoon, changing hands at $6.28, down 6 cents, or about 1%.
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