BOSTON – Negotiations between The Boston Globe and its largest union reached an impasse on Monday, largely over lifetime job guarantees that the 137-year-old newspaper says it has to end if it will survive.
The newspaper's owner, the New York Times Co., struck agreements with six of seven unions at the Globe in an effort to cut $20 million in annual costs. But talks stalled with the largest union, the Boston Newspaper Guild, which represents about 700 editorial, advertising and business employees.
Globe management backed off — at least temporarily — on a threat to file a notice required by federal law to begin the process of shutting down the newspaper. Both sides said they would resume talks in coming days, but did not specify when.
The guild said it had offered more than the $10 million in concessions demanded from it by the Times Co., but that did not include changes to the job guarantees. At least one of the smaller unions agreed to changes in the guarantees for its members, but the guild's president, Daniel Totten, has called ending that job protection a "nonstarter."
Nearly 470 employees across six unions have the guarantees, including about 190 Newspaper Guild members. Most got the promises in a contract ratified in 1994, shortly after the Times Co. bought the Globe for $1.1 billion, in exchange for other concessions at the time. Workers can still be fired for cause, but the newspaper says the guarantees reduce its ability to pare its operational structure.
The Times Co., which overall lost $74.5 million in the first quarter, has said that of all its newspaper properties, the Globe has been the most dramatically affected by the recession, the advertising downturn and the migration of readers online. The Globe had $50 million in operating losses in 2008 and is projected to lose $85 million this year.
Guild Employees said the proposal calls for reductions in pension and retirement contributions by the Times Co., and increased contributions by employees for health insurance. Also in the offer was a 3.5 percent pay cut for Guild employees, plus three unpaid furlough days, for a total salary reduction of just under 5 percent.
Employees covered by a different union at the Times Co.'s flagship paper were expected to vote Monday on whether to take a 5 percent pay cut as well. The New York Times has said that decision could save newsroom jobs and trim $4.5 million in costs.
New York Times Co. shares rose 57 cents, 10.6 percent, to close Monday at $5.97.
After an all-night bargaining session involving the Globe broke off early Monday without resolution, management said it was disappointed it did not have a deal with the Newspaper Guild.
"Because of that, we are evaluating our alternatives under both the Guild contract and applicable law to achieve as quickly as possible the workplace flexibility and remaining cost savings we need to help put the Globe on a sound financial footing," management said in a statement.
The guild has proposed mediation for the remaining issues, specifically the Times Co.'s insistence on eliminating the job guarantees.
Some veteran Globe workers believe eliminating the guarantees would allow the Times Co. to dismiss older, higher-paid employees. But Fitch Ratings media analyst Mike Simonton said guaranteeing employment hinders the Times Co. from adequately lowering its costs.
"The market has changed dramatically since '94 when the agreements were put in place," Simonton said. "It's just a very different environment with a very different outlook. They're not likely feasible for what the newspaper of the future will need to look like. ... The cost structure is going to have to be dramatically different, not 5 and 10 percent cost cuts annual, but very major, significant changes."
Scott Allen, a reporter who was worked at the Globe for 16 years, said the tense negotiations felt like a "roller coaster."
"We're living with a level of uncertainty that most of us have never experienced in our professional lives," Allen said. "Our careers are on the line here."