NEW YORK - The Star Tribune's management reached a tentative cost-cutting deal with its press operators early Friday after an all-night negotiating session in New York. The two sides were under threat of having their labor dispute resolved by a U.S. bankruptcy court later that day.
George Osgood, president of Teamsters Local 1M, declined to reveal any details of the agreement before explaining the deal to his membership and putting it to a vote.
"The membership has a right to know first. I will say that this agreement is more improved than the one the judge would have ruled on. We were able to make changes," Osgood said. "It is a better worse proposal."
The 116 members of the press operators' union must ratify the deal, which involves layoffs, wage cuts, health care premium increases and staffing reductions. A vote is expected Tuesday or Wednesday. Previous cost-cutting agreements last year were voted down by union members.
Star Tribune Publisher Chris Harte said in a prepared statement: "We're very pleased to have reached an agreement with the pressmen's negotiating team. Implementing this deal is critical to the Star Tribune's future. These are difficult but essential cost cuts, and we are glad to have reached an agreement through negotiation. We all want to move forward, emerge from bankruptcy and get the company back to financial stability."
Negotiations between the two sides restarted about 6 p.m. Thursday, after a second day of hearings in U.S. Bankruptcy Court near Wall Street. Four union negotiators flew to New York from the Twin Cities on Thursday morning.
The Star Tribune's management had been asking Judge Robert Drain to void its union labor agreement with the pressmen so it could cut those employees' labor costs by $3.5 million a year -- part of a $20 million reduction in union labor costs it is seeking to restructure the company and emerge from bankruptcy.
The Star Tribune filed for Chapter 11 bankruptcy reorganization in January. The newspaper's management said during the hearings that these labor-cost cuts were critical to prove to creditors that the company is making the changes necessary to run a viable business. The newspaper has said revenue so far this year is down 30 percent from a year ago.
If the union members vote Thursday's agreement down, the matter will return to bankruptcy court March 25 for Drain to decide whether to void the contract.
The dispute between the Star Tribune and one of its 10 unions has been drawing national attention because it comes as major metropolitan newspapers around the country struggle under a steep decline in advertising revenue. The Rocky Mountain News in Denver recently shut down, and many analysts think the Seattle Post-Intelligencer could be next.
The Star Tribune's predicament is complicated by the fact that it was purchased by a New York private equity fund, Avista Capital Partners, two years ago in a leveraged transaction that has burdened the newspaper with $477 million in debt.