SF Chron plan: Web fees, job cuts, givebacks
These steps – and others – were discussed in emergency meetings today between management and union representatives after Hearst Corp. threatened on Tuesday to close the paper if it cannot reverse an operating loss that otherwise would surpass $1 million a week in 2009. The company, which has plowed more than $1 billion into the newspaper in the last eight years without earning a dime of profit, said it lost more than $50 million in 2008.
Management did not reveal the precise number of jobs targeted for elimination, according to sources familiar with the discussions with the California Media Workers Guild and the local Teamsters chapter. In keeping the with the federal law that requires employers to alert workers to any plans to reduce the force by more than 50 employees, the unions were told only that “more than 50 positions” would be scrapped.
As reported here, it would require the elimination of nearly half of the 1,500 employees of the newspaper to wipe out the operating deficit.
To avoid cutting that deeply into the staff, the Chronicle plans to boost revenues by increasing subscription prices for the newspaper and to begin charging consumers for access to certain features and sections at its website. The site, SFGate.Com, now is entirely free.
The pain in San Francisco will be felt throughout the building. Union reps were told that the management ranks will be thinned through layoffs and that a pay freeze for exempt personnel already has been instituted.
A major concession sought from the Guild is the removal of most of the newspaper’s advertising sales staff from union jurisdiction. The move presumably would make it possible to convert the ad staff from hourly wages to a commission-oriented system that would award high producers and weed out low-grossing reps. The company proposes to de-unionize ad reps hired after 2006.
Other givebacks requested by the company would lengthen working hours; trim vacation, sick pay and maternity leave; permit layoffs without regard to seniority; roll back pension contributions; permit the hiring of occasional employees, and suspend a $30-per-week raise scheduled for most Guild workers in January, 2010.
Union sources said they believe management will sell or close the paper if major concessions are not achieved in a “matter of weeks.” Further negotiations are planned on an expedited schedule and the Guild pledged on its website “to do all we can to reach an agreement that will keep the Chronicle open and return it to profitability.”
Among the budget-balancing initiatives, the Chronicle wants the right to outsource certain duties now under Guild jurisdiction, such as the composition of advertising. The ads for the neighboring newspapers operated by MediaNews Group are created in India, achieving a savings of nearly 50% of the cost of producing them in Northern California.
The Chronicle already is well on the way to implementing a plan to print the paper in a non-union plant in suburban San Francisco that will be operated by a Canadian company. When the highly automated plant opens this summer, the members of the paper’s pressmen’s union will be out of thier jobs.
There are potential outsourcing opportunities for the newsroom, as well. One possibility would be to send copyediting, headline writing and page layout to India.
Alternatively, according to one rumor making the rounds today, those duties could be handled at the Chronicle’s sister paper in Houston. Not only would labor costs be lower in Houston than San Francisco, but the difference in time zones would keep the Texas editors busy in the slack time between editions of their own publication.