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UPI workers accept pay-cutting contract.

United Press International and the Wire Service Guild negotiated a 15-month "austerity program" designed to end a 20-year history of unprofitable operation exacerbated by an accelerating cash-flow problem in recent months. Luis G. Nogales, UPI's executive vice president and general manager, said the "stringent measures" would result in savings of $12 million and enable the company "to build a foundation for sustained growth." William Morrissey, president of the Wire Service Guild, called the agreement the "worst . . . I have ever recommended to the membership" but said there was no choice "under the circumstances." Those circumstances included an estimated $7 million deficit for 1984 and $9 million owed to other companies providing service to UPI.

Under the accord, salaries of the 900 union members were cut 25 percent effective September 15, but the cut will be restored in steps and at the end of the agreement salaries will exceed the levels prior to the cut. The cut will be reduced to 15 percent on December 15, 1984, to 10 percent on April 12, 1985, and to 5 percent on July 1, 1985. On October 1, 1985, salaries will be restored to the precut levels, followed by a 3-percent increase on December 15, 1985, and a 2-percent increase on January 1, 1986. Prior to the cut, the "top minimum" (payable after 5 years' service) was $29,026 for reporters and some other employees.

The company also was permitted to postpone its payment to the pension plan for 1 year. When payment is made, it will be retroactive to the normal date.

In return for these changes, 6.5 percent of the parent Media News Corp.'s stock will be distributed to the employees in proportion to the amount each lost as a result of the pay cut. The Wire Service Guild, which is part of the Newspaper Guild, also gained a seat on UPI's board of directors.

UPI's 1,100 nonunion employees voted to accept wage and benefit changes similar to those for the union-represented workers. Many of UPI's financial difficulties have been attributed to the fact that the market for wire news services is dominated by the nonprofit Associated Press, which serves 1,286 newspapers and 5,666 broadcast stations, compared with UPI's 802 newspapers and 3,298 broadcast stations. Also, several major newspapers have established wire news services in recent years.
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Publication:Monthly Labor Review
Date:Oct 1, 1984
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