Star Tribune seeks union cost cuts ($20M necessary, publisher warns)

[Omaha Steve]

http://www.twincities.com/ci_11123670

$20M necessary, publisher warns
By Gita Sitaramiah
[e-mail]
Updated: 12/02/2008 09:49:06 PM CST

The Star Tribune's publisher asked union employees on Tuesday to agree to $20 million in additional cuts by mid-January, saying the survival of the Minneapolis newspaper is at stake.

"We very much hope to reach a consensual solution that will allow our company to adjust our labor expenses to affordable market rates and avoid an expensive and difficult court-supervised reorganization," said Chris Harte in a memo to employees. "Without the support of our unions, an out-of-court solution is not possible."

A series of meetings with employees on Tuesday was accompanied by the e-mailed memo, said Graydon Royce, a Newspaper Guild representative at the Star Tribune. He declined to comment further. The newspaper's union representatives are set to meet this afternoon.

Harte's memo said secured lenders — who already have lost hundreds of millions of dollars on the value of their loans — have made it clear that the company must take immediate action to bring its expenses in line with its greatly reduced revenue before they will agree to restructure the company's debt.

In October, the Star Tribune said it skipped a $9 million quarterly debt payment to senior creditors to save cash as it tries to restructure its debt. All options were on the table, including a bankruptcy filing, Harte said in a Star Tribune story in October.

FULL story at link.