Layoffs and closings have become commonplace at newspapers, but newspapers are also trying some other survival tactics. The San Francisco Chronicle has persuaded its largest union to agree to some contract concessions. The changes need to be approved by a union committee on Thursday. According to the union's website the principal concession will allow the Chronicle to layoff union employees without considering seniority, which means it can more easily cut higher-paid employees. In return, the Chronicle guaranteed a certain amount of severance benefits for those workers who were laid off.
Like the automakers, the newspaper industry spends a lot of its revenue on unions that do everything from print its papers to deliver them across their respective cities. And, as with the Detroit, those costs are becoming increasingly unsustainable. In some cases, the unions will face the decision of conceding on some terms or facing their fate in bankruptcy proceedings, where there is a chance the unions may be wiped out if the court decides it is the only way for papers to achieve profitability.
David adds: Newspaper unions are being asked for more flexibility in range of areas in the name of keeping local pubs alive. One area that union members have avoided is the unpaid leave programs that are quickly being adopted at a number of major publishers. Although they haven't asked for it yet, In lieu of further layoffs, unions at Gannett (NYSE: GCI) and MediaNews may eventually have to decide on whether to accept unpaid furloughs next quarter. So far, only non-union members have forced to comply. But if the newspapers can't arrest their troubles somewhat, this will likely be the next step.
By Rory Maher