On Monday, the Boston Globe union voted down a contract proposal that would have cut pay and benefits by 10%. Now the union faces cuts of 23%, and possibly the end of the newspaper altogether.

Let's backtrack for a moment to take a look at the negotiations that have clearly fallen apart. Prior to the vote, the Boston Globe Union Attacks Management.

Members of the Guild will vote Monday on the concessions negotiated after the Times Co. said it needed $20 million in annual savings from Globe unions to avoid having to shut down the 137-year-old newspaper. The Globe had $50 million in operating losses in 2008 and had been projected to lose $85 million this year.

The Times Co. demanded half the concessions from the Guild -- the Globe's largest union with 700 editorial, advertising and business employees. The new contract proposal includes an 8.3 percent wage cut, five-day unpaid furloughs and cuts in benefits. It also would end lifetime job guarantees for 190 Guild workers.

"It is essential and non-negotiable that we achieve $10 million in cost savings from the Guild," Ainsley said. "Our financial situation is too urgent and further delays to resolution are not an option."

If the union rejects the proposal, the Times Co. could seek to declare an impasse, which could let it follow through with threats to impose a 23 percent wage cut.

Beth Daley, a union delegate and environmental reporter at the Globe, said in an interview Thursday that many colleagues likely would reject the proposal -- some because of increased health care costs, others because of pension cuts.

"For a lot of people, it's just the darn pay," said Daley, who also planned to vote "no."

Boston Globe Union Rejects Offer

Please consider Boston Globe Union Rejects Wage and Benefits Cuts .

After weeks of labor tension and 12 hours of suspenseful voting, members of the Newspaper Guild at The Boston Globe narrowly rejected a proposed package of wage and compensation cuts. As a result, the newspaper’s owner, The New York Times Company, said it would proceed with its threat to unilaterally impose a 23 percent salary cut.

My Comment: Nice Going Unions! You would not agree to -10% so now you face -23%.

“With today’s vote, members of the Boston Newspaper Guild have said that the New York Times Company must do better,” he said. “Boston Newspaper Guild is committed to resuming good-faith negotiations.”

The package put up for a vote included a wage reduction of about 8.4 percent, a one-week unpaid furlough equivalent to a pay cut of 1.9 percent, the elimination of company contributions to retirement plans and an array of other concessions.

Union officials had said before the voting that they would fight any unilateral cut with the National Labor Relations Board and they hoped that rejection of the company proposal would instead lead to a new round of negotiations that would produce a package more amenable to the union’s membership.

My Comment: If the National Labor Relations Board upholds the union's position, the Times will shut down the Globe. It will be the union's last hollow victory.

“This is not the time to go to war,” said one such employee, Scott Allen, a reporter, after the vote was announced. “This is the time for management and labor to sit down and work out an agreement.”

My Comment: If this was not the time for war than why did the union vote for war?

Dan Kennedy, a journalism professor at Northeastern University who has closely followed the talks, said the showdown had been badly mishandled on both sides, by a belligerent union leadership and a company that never adequately explained itself.

The fortunes of the Times Company, like those of the entire industry, have turned sharply downward over the last two years — and especially in the last six months — as a long-term slide in advertising worsened.

The company posted a net loss of $57.8 million for 2008, and $74.5 million in the first quarter of this year. The Globe has been the biggest drain by far, with operating losses of $50 million last year and a projected $85 million this year, not counting the union concessions, according to management.

Several other unions have approved concessions, including the drivers, who voted on Sunday, increasing the significance of the guild vote.

Like most American newspapers, The Globe has already gone through a drastic downsizing. “It’s simply tragic that one of the great regional newspapers, The Boston Globe, is unable to operate in the black, and tragic to watch the thinning of the paper over time,” said Alberto Ibargüen, a former Miami Herald publisher and president and chief executive of the John S. and James L. Knight Foundation. “But it’s going on in every city in America.”

Message to brain dead union leadership:

Here's The Deal

1) The Globe had operating losses of $50 million last year and a projected $85 million for 2009.
2) The parent company lost money as well.
3) The alternative to pay cuts is the entire newspaper might shut down.

Questions for the Guild: Exactly what is it about the above that you fail to understand? Isn't a job with a 10% paycut better than no job at all?

Those afflicted with Brain Dead Disorder (BDD) somehow think 0% of a loaf is better than 90% of a loaf.

I did not anticipating writing two posts back to back about BDD. The first, less than 12 hours ago, was about Brain Dead Unions In California.

If another case breaks out tomorrow, the center for disease control may need to investigate. BDD might be caused by a mutation of the highly contagious Fiscal Insanity Virus that is rapidly spreading the globe.

Mish

GlobalEconomicAnalysis.blogspot.com