Newspaper Owners Play Hardball With Union: Agree to Our Proposed Cuts or Face 'Liquidation

The Philadelphia Inquirer and the Philadelphia Daily News were recently acquired by new owners who apparently have no patience for union contract negotiations: They’ve threatened to “liquidate” both papers if concessions aren’t made.

“In a letter to members of the Newspaper Guild, union president Dan Gross and executive director Bill Ross say that Interstate General Media -- which bought the papers last year, along with Philly.com -- is seeking $8 million in immediate wage and benefit cuts from the editorial staffs of those papers, even though the guild’s contract runs to October 2013,” Philadelphia Magazine reports.

Unsurprisingly, as it's made clear in a guild memo, union leaders are none too pleased with the proposed cuts:

When they acquired the company in April, Interstate General Media was well aware that the Newspaper Guild had a contract in place through October 2013. It was also at this time that owners George Norcross and Lewis Katz both stressed how much the newspapers meant to them and how they were in this business for the long haul. We will not be held out as scapegoats, to be blamed for not bargaining a new agreement while we have one standing. The owners are smart businessmen who do not leap into business deals or investments blindly.

Nevertheless, and despite having incurred the wrath of the guild, the owners insist: Agree to the cuts or face “liquidation.”

“It’s a hardball tactic—but would the company, owned by local business giants like Gerry Lenfest and George Norcross, really destroy the papers if they can’t secure a pay cut for reporters?” the Philly Post asks. “We’re about to find out.”

Here’s the full guild memo (courtesy of phawker):

Dear Guild member,

Interstate General Media today threatened to liquidate or sell the assets the company, which owns the Philadelphia Inquirer, Philadelphia Daily News and Philly.com, as of January 18, 2013 if it does not reach tentative agreements with all of its unions, including the Newspaper Guild.

As you know, our contract expires in October 2013 while the other ten union contracts expired in October 2012.

Last summer, IGM ownership asked that the Guild volunteer to take pay cuts a year ahead of our contract expiration in order to help the company which was hemorrhaging money. The company seeks to cut $8 million out of our wages and benefits.

While bargaining with the other unions, the company shamefully, and repeatedly assured the other groups that the Guild would be opening its contract and giving concessions at this time. Nice of them to have such confidence that we simply couldn’t wait to give up our pay.

When they acquired the company in April, Interstate General Media was well aware that the Newspaper Guild had a contract in place through October 2013. It was also at this time that owners George Norcross and Lewis Katz both stressed how much the newspapers meant to them and how they were in this business for the long haul. We will not be held out as scapegoats, to be blamed for not bargaining a new agreement while we have one standing. The owners are smart businessmen who do not leap into business deals or investments blindly.

While bullying and scare tactics might be have helped at least one of the owners to make his millions, that’s a horrible way for a company responsible for publishing newspapers vital to the public trust, to operate.

As an example of the kind of fiscal foolishness we are dealing with, at the same time it threatens us and claims to be on the verge of liquidation, Interstate General Media is also issuing a buyout program today, using money it claims not to have to get our members to leave.

The company also continues to hire.

We are unwilling to once again bail out an ownership group without full access to the company’s books and a realistic discussion of future revenue plans.

In solidarity,

Dan Gross, President,

Bill Ross, Executive Director,

and the Executive Board of the Newspaper Guild/Communications Workers of America Local 38010

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