Philly newspaper guild: Owners threaten liquidation without major concessions

The owners of Philadelphia’s two major newspaper are threatening to liquidate the Inquirer and Daily News, according to a newspaper union official, unless the company gets major concessions in the next week.

Dan Gross, president of the Newspaper Guild of Greater Philadelphia, said Interstate General Media (the papers’ parent company) says if it doesn’t have tentative agreements reached with all of its labor unions by Jan. 18, it will begin to liquidate the assets of the company.

Gross says that’s surprising.

“After seven months, they’re now threatening to, you know, sell the business or shut down or whatever it is that they’re going to do, based on not getting cost savings that they should have been able to figure into when they bought the place,” Gross said.

A union statement to members says the company is seeking $8 million in pay and benefit cuts. The guild’s contract runs to October.

A spokesman for the parent company could not be immediately reached for comment.

Gross says it doesn’t make sense for the company to make the threat while also issuing a buyout program. 

“If suddenly they have a pool of money that they’re going to use to get our members to leave … I would think that same money could be used to fund the company at least until October when our contract is up … let them try to get whatever savings they want to try to get from us then,” he said. “But to try and force them on us at this juncture is both offensive and premature.”

The full text off the Guild’s statement to members is printed below: 

Dear Guild member,

Interstate General Media today threatened to liquidate or sell the assets [of] 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