Here's a March 30, 1988, story by UPI business writer David Vesey about UPI's new business plan to turn a profit within two years.
WASHINGTON (UPI) -- United Press International announced a plan Wednesday to go from perennial money loser to profitability within two years by creating and expanding market-oriented news and information services through cost cutting, including eliminating nearly 150 positions company-wide.
At a news conference to outline the new services' rebuilding plan, UPI President Paul Steinle and Chairman Earl W. Brian stressed that UPI will remain a full-service, 24-hour-a-day, worldwide news agency.
The company, which is losing about $2 million a month, will focus on services that receive substantial client support, including state and regional news, while developing new products for media and non-media clients, especially in the area of financial news.
The business plan was written after two research firms interviewed more than 500 news media representatives.
"We found out what UPI is doing right but, more importantly," Steinle said in a statement, "we found out what UPI is doing wrong."
The UPI turnaround program involves two phases: a three-to-six-month period to stabilize the company and a second phase to move UPI into new and expanded lines of business. During the first phase, UPI expects to save $5 million through staff reduction and spending $5 million in deficit financing, Brian said.
A key to success, Steinle said, will be continuous monitoring of market use of UPI products and feedback from clients.
Brian said the business plan is feasible and can attract investors.
"I estimate approximately $15 million in permanent equity financing will be required by the time we have completed the second phase," he said. Steinle and Brian said it was not clear until a few days ago whether a business plan could be worked out to save UPI from liquidation. Asked what factor made it possible to formulate a plan, Brian responded: "financibility." He added that investors have expressed interest in funding the UPI turnaround, including some major media companies, and that Infotech will provide short-term bridge loans until the investor capital is in place.
Kendrick Noble, an analyst who follows the media for PaineWebber Inc., said the UPI business plan is on the right track.
I agree with the basic strategy, it's sound."
Noble added that creating products for non-media clients is the best way for the news agency to raise revenues, but he cautioned that "competition continues to grow in financial news."
The plan will require staff assignment changes and a reduction of nearly 150 positions, Steinle said. Of those, he said fewer than 100 will be editorial, with many of the cuts accomplished by attrition.
"We do not anticipate further cutbacks," he added. Under the plan, the number of full-time employees at UPI worldwide will be reduced by 14 percent, to 1,130, from 1,280 before the cuts.
A top priority of the business plan will be "strengthening state and regional reporting, which is the backbone of our national report," Steinle said.
Another area of emphasis will be technical reporting that most local newspapers and broadcasters cannot cover effectively due to lack of resources.
"This includes . . . business and financial news and analysis and its effect on the consumer, plus more and better reporting in areas such as health, science, law and medicine," Steinle said.
The business plan, "UPI 2000," also calls for:
-- "Unbundling" of UPI products to allow customers to buy specific products instead of limiting clients to an all-or-nothing deal.
-- Implementing a digital photo transmission service in 1988.
-- Saving $10 million in the first year through administration cost control.
Steinle became president of the 81-year-old news agency Feb. 19 when an outside management team, WNW Group Inc., obtained operating control of UPI from Mexican publisher Marion Vazquez-Rana, who purchased UPI, then in bankruptcy, in 1986.
In addition to being chairman of UPI, Brian also chairs WNW Group and its parent firm, Infotechnology Inc., a New York-based information technology and venture capital company.
"We know how to operate companies within their means and we have links to other companies with significant future joint-venture potential for UPI in the information industry," Brian said.
Joint ventures, Brian said, are possible with other firms in the Infotech family of companies. They include cable television's Financial News Network, Data Broadcasting Corp. and Comtex Scientific Corp., which already are in the business of supplying information to private individuals and businesses. Steinle and representatives of the Wire Service Guild, which represents more than 700 UPI workers, met Wednesday.
Later, the guild said it wants to work with UPI management and make the business plan a success, but noted that union members have been working without a contract for one year.
"We agree . . . that what UPI needs now is stability (and) believe the logical next step toward stability is for management to reach a fair and equitable contract with its employees," said union spokesman Sean McCormally.
On the subject of layoffs, Steinle said UPI would offer assistance in finding new jobs. "It will include letters to prospective employers, resume and job search skills training and national advertising," he said.
"Our people are skilled professionals and are losing positions through no fault of their own."