Star Tribune, press operators resume talks

Star Tribune management and the press operator's union resumed negotiations in New York City late Thursday. The two sides were planning to talk throughout the night and this morning to come to an agreement on cost cuts to avert intervention by a U.S. bankruptcy judge.

Four union negotiators -- all printing plant employees -- flew to New York from Minneapolis during the day, arriving at the bankruptcy courtroom shortly after noon. They listened to a second day of arguments in which the Star Tribune was asking the court for permission to impose the company's concessionary offer with 116 unionized printing employees.

The Star Tribune is seeking some $3.5 million in cost cuts from these employees, part of a total $20 million in annual labor cost cuts the paper said it needs from its unions.

After a steep fall in advertising revenue in 2008, the Minneapolis paper filed for Chapter 11 bankruptcy protection in January when it could no longer service its $477 million debt. The debt burden arose after New York private equity firm Avista Capital Partners purchased the Star Tribune two years ago in a leveraged buyout.

At the end of Thursday's hearing, Judge Robert Drain spoke directly to the press operators sitting in the back of the courtroom. He urged them to strike a deal now to avoid the risk of shutting the paper down in the future.

"If a secured creditor says, 'We're willing to accept liquidation,' I don't have a magic wand," said Drain. "As much as I can make a deal work, I don't have the ability to force them [the creditors], if they don't want to, to make a deal, not to pull the plug. It is a serious matter."

The two sides -- management and labor -- are scheduled to return to court this afternoon. Drain said he could rule at that time whether to allow the company to impose terms if the two sides fail to reach a deal. But Drain also said that he could delay a decision until Tuesday if the sides could use more time to finish negotiations.

The two sides are still far apart on how many press operators are needed to run press equipment and how many should be laid off.

During Thursday's hearing, union president George Osgood said the pressmen's biggest concern was whether the Star Tribune, as a bankrupt entity, could guarantee the severance payments it is promising to employees who are laid off.

"The biggest reason for the opposition is that there is absolutely no trust among our membership for management," Osgood said.

Drain indicated severance payment guarantees could be handled through the bankruptcy process. He told the press operators that he recently authorized payment of severance checks to some of the Star Tribune's other union members, even though the obligation was incurred prior to the Star Tribune's filing for bankruptcy and the money could have gone to creditors.