The Boston Globe's parent company, The New York Times Co., says it won't close the 137-year-old newspaper, after identifying $20 million in annual savings.
The Times said Tuesday it would now focus "on executing the Globe's turnaround plan."
On Monday, it imposed a 23 percent pay cut on members of its largest labor union, the Boston Newspaper Guild. The Times Co. says the wage cut and $10 million in savings from other unions will help the newspaper.
The company imposed the pay cut after the Guild narrowly rejected a contract proposal that would have achieved the savings through an 8.3 percent pay cut, five-day unpaid furloughs and other concessions.
The union has said it would ask the National Labor Relations Board and the courts to block the pay cut.
The Boston Newspaper Guild, which represents 700 editorial, advertising and business employees, voted 277-265 Monday against the new contract negotiated after the Times Co. said it needed $20 million in annual savings from Globe unions — half from the Guild.
The Times Co. demanded the concessions amid an increasingly dire financial situation at the Globe. The newspaper has struggled as readers migrated to the Internet, advertising revenue declined drastically and circulation fell. The Globe had $50 million in operating losses in 2008 and had been projected to lose $85 million this year.
Six other Globe unions have approved concessions — but they hinged on the Guild's ratification of new terms.
No 'financially viable alternative'
The Times Co. had said that if the Guild rejected the proposal, it would try to impose a 23 percent wage cut. It also has threatened to close the newspaper, which would require giving 60 days notice to employees and the state.
In a statement released after the vote, the Globe said it was disappointed with the outcome and had no "financially viable alternative" but to declare an impasse and impose the deeper wage cut to achieve the necessary savings.
The cut would take effect next week. The Globe said the newspaper would be willing to meet with the union this week to review implementation of the cut.
About 80 percent of union members voted on the concessions. Union leaders had presented the contract offer to the union without a recommendation either way.
The contract included an 8.3 percent wage cut, five-day unpaid furloughs and cuts in health care benefits, 401(k) contributions and pensions. It also would have eliminated lifetime job guarantees for 190 Guild workers. Most got those promises in exchange for other concessions in a contract ratified in 1994, shortly after the Times Co. bought the Globe for $1.1 billion.
Union president Dan Totten said the vote reflected the feelings of the rank-and-file and he called for a resumption of bargaining.
"Members of the Boston Newspaper Guild have said that the New York Times Co. must do better than the offer that was presented," Totten said in a statement. "The Boston Newspaper Guild is committed to resuming good-faith negotiations with The New York Times Company and Globe management to reach an agreement."
Employees at dozens of other newspapers have recently agreed to pay and benefit cuts, but those proposed to the Globe's Guild members would have been among the deepest.
"I think we hope the New York Times Co. comes to its senses and takes away the gun pointed at our heads," said Brian Mooney, a reporter who voted against the contract.
'Situation is too urgent'
Some reporters who voted yes said the chorus of "no" votes was much louder in the newsroom when it came to voting on the concessions. Those voting against the plan said the Times Co. needed to share in the cuts.
But with the newspaper's dire finances, management officials said quick action was necessary.
"It is essential and nonnegotiable that we achieve $10 million in cost savings from the Guild," Publisher P. Steven Tinselly wrote in a memo to Guild members last week. "Our financial situation is too urgent and further delays to resolution are not an option."
Teamsters Local 259, which represents the Globe's delivery drivers, voted 89-69 Sunday in favor of roughly $2.5 million in wage and benefit cuts. A machinists union representing fewer than 30 employees rejected concessions that day, the first union to do so.
Many newspaper workers across the sector have reduced their pay and benefits in an effort to keep their jobs as the recession exacerbates an already tough industry environment. This year has been marked by the closure of a number of papers, including the Rocky Mountain News in Denver, and the bankruptcy protection filing of major newspaper companies, such as the owner of the Chicago Tribune and Los Angeles Times.
Union workers at The New York Times agreed last month to accept a 5 percent pay cut through the end of the year and take 10 days paid vacation to help the newspaper avert more layoffs. Management plans to restore pay to its previous levels next year if the newspaper's advertising revenue rebounds.
The union representing newsroom employees at the Milwaukee Journal Sentinel in April approved a 6.6 percent pay cut for its members in exchange for 10 more paid days off this year, as well as a guarantee of no layoffs through Sept. 30.