The Minnesota Orchestra is on the brink of its first work stoppage since 1994. Union musicians voted unanimously on Saturday evening to reject what management had described as its final contract offer.

The two sides will meet Sunday to see whether they can resolve the dispute that has grown increasingly acrimonious.

Orchestra CEO Michael Henson said in a statement Saturday night that he was disappointed by the union vote and hoped "the players come with a realistic counterproposal" on Sunday.

Sources close to the negotiations said the union will propose that the two parties go to binding arbitration. If management agrees, the musicians will then make an offer.

In binding arbitration, both sides agree to abide by the ruling of an independent arbitrator.

Absent agreement, management has said it will lock out the musicians when the contract expires at midnight. That means musicians could not report to work and would not receive paychecks.

"We are not close at all," principal trombonist Douglas Wright said Saturday. "The musicians are very unified and resolved to maintain a world-class orchestra."

The immediate impact of a lockout would be negligible, since the orchestra's season doesn't start until Oct. 18. However, given the bitterness that would come from a lockout, patrons worry whether key musicians, who have made the orchestra a world-class ensemble, would seek work elsewhere.

"I think Detroit answered that question," said Chicago-based arts consultant Drew McManus, referring to the fallout from a six-month strike there in 2010-11. "People left in droves. They lost a whole stand of violins and their entire percussion section."

Wright said that a number of musicians have been taking auditions with other orchestras and that if the management's proposal to cut average annual pay from $135,000 to $89,000 goes through, younger players would replace experienced musicians, which would "hurt the quality of the orchestra for years."

Orchestra's finances

The musicians continue to push for an independent financial analysis of the orchestra. "It is impossible for the musicians to consider these orchestra-killing cuts without a clear financial picture," said Tim Zavadil, clarinet player and member of the negotiating committee.

Management has said that an analysis would be redundant because it issues an audited financial report each year.

Meanwhile, at the St. Paul Chamber Orchestra, management rejected two union suggestions during an all-day session. They will meet again Sunday, but board chairman Dobson West said he did not expect a deal to emerge.

"There is still a lot of work to be done and for us to dot all the i's and cross the t's by Sunday night, I would be very surprised," West said Friday. In contrast to the Minnesota Orchestra, however, he said the sides have meetings planned for October.

National significance

The Minnesota Orchestra has drawn national attention for its musicianship under music director Osmo Vänskä and the degree of the pay cuts being proposed. Critics have raved about performances at Carnegie Hall and at the BBC Proms in London. Musicians believe they have accomplished the challenge from Vänskä to become one of the best orchestras in the world.

Why then, should they be asked to make financial sacrifices that, according to a union source, would total $5 million annually?

The board counters that it cannot sustain operating deficits that require withdrawals of 10 percent each year from the orchestra's investments. Further, it has become clear that the organization relied on overly optimistic investment projections when it signed a five-year contract with the musicians in 2007.

Recent deals in Atlanta and Chicago also draw attention to Minnesota. The Chicago Symphony Orchestra settled a two-day strike with small pay raises coupled with sharp increases in health care premiums. In Atlanta, musicians were locked out for three weeks and then ratified a deal resulting in $2.4 million in contract savings. Salaries for senior staff were cut 6 percent.

"You have Atlanta taking this big cut, and if Minnesota takes a big cut, you could see this snowball to other orchestras of a similar size," said McManus. "The field has grown tighter, and these settlements will influence others."

Hung up on retirement

Early last week, it appeared the SPCO had the framework for a deal on the table. However, it has become clear that the dispute is about more than just pay. Management wants to create an early retirement incentive program and a second wage scale for new musicians. West said donors have said they would fund specifically a retirement program to "transition the orchestra."

"But they won't give money just to put into salaries -- which they see as a short-term fix," West said.

The players disagree. "Management admits that it has the money right now to ... keep our best musicians, but they would rather force musicians into retirement," said bassoonist Carole Mason Smith, head of the musicians' negotiating committee.

Players argue that if there is money for a retirement program, it should be funneled into wage scales.

At an SPCO concert Friday in Wayzata, many patrons said they were aware of the labor tensions at both orchestras.

"I realize the attendance is down and giving is down, but I'm concerned because musicians could easily go elsewhere," said Jim Christenson of Maple Grove.

One woman said she wasn't up to speed, other than, "I hear they're hurting for money."

Graydon Royce • 612-673-7299 Twitter: @GraydonRoyce