Newspapers, largest union reach tentative deal

The parent company of The Inquirer, the Philadelphia Daily News, and Philly.com reached a tentative agreement on a new contract with the last and largest of its 11 unions Thursday, a key step in the company's efforts to return to profitability.

The Newspaper Guild of Greater Philadelphia said it had tentatively agreed to a two-year contract for its 550 members that includes a one-time 2.5 percent across-the-board wage cut but also commits the company to maintaining its current printing schedule for its two daily newspapers in 2013 and 2014.

At a time when some newspaper companies have been reducing the frequency of their print publications, leaders of the Guild and other trade unions had sought assurances that Interstate General Media L.L.C. would continue to publish its broadsheet and tabloid newspapers even as it continues to direct more resources toward its online news sites.

Robert J. Hall, chief executive officer of Interstate General, said the company "should be profitable this year" with the new agreements. The newspapers lost money in both 2011 and 2012, he has said.

He acknowledged "difficult decisions" that led to concessions made by all of the union leaders, including those of the Guild - who made the rare decision to reopen an existing contract. The existing contract was to run through October.

Bill Ross, executive director of the Guild, said he and the Guild's negotiating team understood how dire the situation had become. "I'm happy we were able to reach a fair agreement for both sides," he said.

The Guild expects to schedule a ratification vote for its members next week.

Most of the 10 other unions, whose contracts had expired in October, have ratified new two-year agreements. The workers who operate the presses for The Inquirer and the Daily News ratified a new contract Thursday. Unions representing paper handlers and mailers have votes scheduled, the handlers Friday and the mailers Sunday.

Hall would not say how much savings the company would yield from the new agreements. The Guild said its new contract would save the company about $7.1 million in expenses, with much of that coming from a change in how the company contributes to the union's health and welfare fund and from anticipated buyouts.

Before bargaining began, the Guild said the company had indicated it would begin selling assets or liquidate should it not obtain concessions.

Hall said the ownership group that bought the media properties in April was now focused on growth. "These agreements position our company to grow in the future," he said. "All the owners are committed to making this a success."

Guild officials said the new contract protects its members, who work in the newsroom, advertising sales, circulation, and finance departments, from layoffs for one year.

The new contract continues having 10 unpaid furlough days per year in 2013 and 2014. That would be equivalent to a pay cut of an additional 4 percent.

So far, 13 members of the Guild have been approved for buyouts and six others for reduced workweeks. Both voluntary programs have been extended for two more weeks.

The company also established a fund to provide an enhanced voluntary separation package for newsroom employees with a minimum of 30 years of seniority.