Sun-Times Media Group Cutting Salaries of Nonunion Employees | Bleader

Wednesday, September 9, 2009

Sun-Times Media Group Cutting Salaries of Nonunion Employees

Posted By on 09.09.09 at 12:31 PM

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Interim CEO Jeremy Halbreich memoed the nonunion employees of the Sun-Times Media Groupo Wednesday telling them the tentative sale of the company's assets will require them to make a financial sacrifice, and laying out what that sacrifice will be.

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"We are announcing today a base pay reduction for all non-union employees who make more than $25,000 in annual base pay," said Halbreich. "The only exception will be the advertising sales staff below the vice president level, because they have already had their total compensation decline significantly due to the downturn in advertising revenues. While this is a difficult, unexpected and tough measure for the Company to implement, it is necessary along with the financial resources committed by the new ownership group to ensure a prosperous future for the Company’s newspapers and Web sites and employees.

"The pay reduction program works like this: the first $25,000 of any employee’s base pay will not be reduced; base pay between $25,000 and $100,000 will be reduced by 8 percent; and base pay over $100,000 will be reduced by 11 percent."

Earlier this year, union employees accepted pay cuts of 15 percent. The understanding was that salaries would snap back to normal when the company was sold, but union leaders were recently told that for the sale to go through, the unions must be willing to live with those cuts indefinitely. On Tuesday the company announced that a formal bid of $5 million, plus the assumption of over $20 million in debts, has been made by an investment group led by James Tyree, CEO of Mesirow Financial. Unless the Delaware bankruptcy court overseeing the sale receives a higher bid (an unlikely possibility), Tyree should soon be running the chain of about five dozen daily and weekly newspapers.

I asked one local leader what he thought of the terms Halbreich was giving his nonunion employees. "I think we were under impression everybody was sharing alike. I’m sure my people will be pissed,” this leader replied, acknowledging, however, that nonunion employees have suffered far more extensive layoffs than the organized work force — which chose to slash salaries to save jobs.

According to a court document filed by the company, the STMG employs 1,409 hourly workers, of whom 45 percent are unionized, and 495 salaried employees. A management spokesmen said all the salaried workers are nonunion.

Here's a pdf of Halbreich's memo:

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