, BOSTON, June 9 – Members of the largest union at the Boston Globe narrowly rejected wage and benefit cuts on Monday that its owner, The New York Times Co., warned were needed to keep the newspaper alive.
Globe management announced immediately following the 277-265 rejection by the Boston Newspaper Guild of the proposed cost-saving package that it was slashing the pay of all Guild members by 23 percent.
"This will secure the 10 million dollars in costs savings needed from the Guild, and will allow the Globe to reach the targeted 20 million dollars in savings needed from all our major unions," it said in a statement.
"Since the parties are at an impasse, the Globe will implement the wage reduction effective next week," the management statement said. "We regret having to take this action, but have no financially viable alternative."
Newspaper Guild president Daniel Totten said following the close vote that the union is "committed to resuming good-faith negotiations with the New York Times Company and Globe management to reach an agreement."
The Times Co. reached deals with six of the Globe\’s seven unions last month on 10 million dollars worth of cuts but failed to strike an agreement with the Newspaper Guild, which represents 600 editorial, advertising, and business office workers, on another 10 million dollars in concessions.
The New York Times warned when the talks began that it needed a total of 20 million dollars in savings from the unions or it may be forced to shut down New England\’s largest paper.
The New York Times Co. purchased the 137-year-old Globe for 1.1 billion dollars in 1993.
Like other US newspapers, the Globe has been grappling with a steep drop in print advertising revenue, steadily declining circulation and the migration of readers to free news online.
The Globe is forecast to lose 85 million dollars this year, according to the Times Co., which has been struggling with escalating losses of its own and a heavy debt burden.
The Times Co. recently completed a sale-leaseback deal for part of its Manhattan headquarters in a move aimed at raising cash to pay down its debt.
It also received a 250-million-dollar loan from Mexican billionaire Carlos Slim.
The Times is also seeking a buyer for its 17.75 percent stake in New England Sports Ventures, which includes the Boston Red Sox and their iconic stadium, Fenway Park.
With a weekday circulation of around 300,000, the Boston Globe is the 17th largest newspaper in the United States. It began publishing in 1872.