New York Times: We're not bluffing about shutting The Boston Globe

The New York Times Co. (NYT) and the Newspaper Guild have been at loggerheads for weeks over the publisher's demand that the union agree to steep pay cuts or face the closure of New England's largest newspaper. Now the rhetoric is starting to heat up ahead of a June 8 union vote.

"The Boston Globe can not be a viable business given our current losses," publisher Steve Ainsley told his staff yesterday, according to Bloomberg News.

His point was echoed by Times spokeswoman Catherine Mathis who said New York-based company needs to achieve $20 million in savings from the unions in Boston. The Globe is expected to lose $85 million this year.

"Closure is a very real path for the Company to take," the Boston Phoenix quotes Mathis as saying. "The Guild seems to believe it can reject the contract, prevent implementation and thereby force further negotiation. That's not right. Time is of the essence." [emphasis added]

Mathis was less strident in remarks emailed to DailyFinance.

"We are not going to predict how the votes will go but are hopeful that the unions will approve the contracts,"she said. We are consolidating the operations of two of our printing facilities in the Boston area, raising newsstand and home delivery prices, reducing headcount and compensation expenses, which all benefit the Globe's financial performance."

The Guild is trying to push back on the publisher, which spent $1.1 billion in 1993 acquiring the parent company of the Globe. In April, it began a "Save the Globe" petition. Union president Daniel B. Totten's efforts to engage in public negotiations with the Times were -- not surprisingly -- rejected. He couldn't be reached for comment.

As New England's economy soured, the Globe became an albatross for the Times. Like other big city metros, the Globe was hurt by plunging circulation and advertising revenue as readers increasingly sought their news online. In the first quarter, the operating loss at the News Media Group, which includes The Boston Globe, the Worcester Telegram & Gazette and their website, was $54.3 million compared with operating profit of $13.3 million in the first quarter of 2008.

Loses at the New England papers were "significant."
The proposal from the company includes salary cuts of 8.4 percent and the elimination of guaranteed employment for some employees, two people familiar with the plan told Bloomberg.

The union will have to decide which is worse, having a poorly paid job or no job at all.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum