Late Dan Carmichael's Take on 1990 Pay Cut

Here's a Nov. 9, 1990, message posted by the late Dan Carmichael, a Wire Service Guild leader and Washington staffer at the time, urging a "no" vote on the 35 percent pay cut (The pay cut proposal was adopted by Guild members):



i believe there are compelling reasons to reject the latest scheme by yet another upi management -- a 35 percent pay cut that will apply to most of us, but not to some of the senir managerswho are its champions.

the decision, to be sure, is very personal, as it should be, but i believe a reasoned, careful examination of the facts argues strongly for a "no" vote. there are at least five key reasons to vote "no."



not everyone will take the 35 percent cut if it is approved. some senior upi managers havebeen shifted off upi's books, sparing them the pay cut. one of them reportedly includes anne kott, the labor relations aide who helped engineer many of our highly regressive contract provisions -- including only 10 days of sick leave a year, not a penny contributed to the union pension fund since 1987 and drastically reduced severance pay.

some foreign personnel also will not suffer the pay cuts, for legitimate legal reasons.

during a staff meeting in washington last week, pieter vanbennekom conceded there would be "some exceptions." what exceptions? well, he didn't say. just who is taking this pay cut anyway? and what are their salaries and job responsibilities?



his pay cut proposal is being sold by the same failed, discredited enior management that has disembowled upi, throwing hundreds of our colleagues out of work and closing bureaus in some 35 states. upi is essentially unsaleable because of what they have done. this senior management hs lurched from one bad idea to another, always claiming there was "a plan." in face, the senior management has never produced a single consistent, cogent, sensible idea -- much less "a plan."

now, in an effort to save their own highly-paid jobs, members of this senior management have spent a great deal of time, and upi's money, trying to sell this pay cut. approval would certainly position them as "heroes" in the eyes of a new buyer. that may be fine for them, but should we use a significant portion or our paychecks to save the jobs of a failed management?

the guild has not even been allowed to see upi's books. employee have no way of knowing the salaries of top executives -- or even if those salaries were quickly inflated in anticipation of the pay cut campaign.

i have also been disturbed by heavy-handed management lobbying for this scheme. i believe those managers, and upi, may have federal legal problems because of how far they have gone, using upi money, by interjecting themselves into a union vote. i anticipate exploring that issue in the near future with the appropriate federal agency.

i also believe this pay cut is a clever attempt to absolve the parent company, infotechnology, of severance and other contingent liabilities related to a shutdown.



i believe the only "buyers" for upi are a few fringe "cherry-pickers" who want upi's name and, perhaps, a few isolated assets. those assets do not include upi's employees, in my opinion. at any rate, management's refusal to identify any "buyers" to employees or the union -- or to involve us in the process -- raises serious suspicions.


something for nothing

the idea of a 25 percent pay cut in 1984 made sense. there was an organization to save and sell, not to mention almost 900 union jobs. the company has since been eviscerated. the 1984 wage-cut deal also contained legally binding incremental salary increases, in 5 percent segments, that culminated with a 5 percent pay increase.

employees got 6.5 percent of the stock of the parent corporation -- although management reneged and the stock was never turned over to unipressers. the union also got a significant package of concessions from the company that enabled it to utimately become the most powerful part in federal court during the subsequent bankruptcy in 1985.

this time, the company offers nothing to employees in return for the pay cut. not a single guarantee or sign of good faith. upi management even refused to allow employees on the board of directors to monitor the fairness and adequacy of attempts to find a buyer. why?

why does the senior management of this company want to wring more money out of the employees, without even a minimal stock guarantee in exchange? the stock would undoubtedly be worthless, but such a move would show a glimmer of good faith.


deal only with a buyer

it is utter folly to give a 35 percent pay cut to a management on its way out. if a deal is to be made, it should be negotiated with a buyer, if there is one. otherwise, a new buyer will regard a 35 percent pay cut as a given -- and then demand more concessions.

why make two deals instead of one? why cut down your negotiating base? are you willing to take a 45 percent pay cut? a 50 percent pay cut? give up all vacation or severance pay?

regardless of your view, such decisions should be made on an informed basis. we all should know who the buyer is, wht he has in store for upi, and for us, and then make a decision based on thse facts. we certainly should know, also, where all upi's money went -- something reportedly being examined by e securities and exchange commission and at least one u.s. attorney.

a pay cut also is premature. because any sale of upi is contingent on a new audit, we could take a pay cut and then find out the company cannot be sold under any circumstances.


ultimately, you must make your own decision. there have been many eloquent messages on the wire on both sides. many of you have talked it over with your loved ones and will take that into account.

it is a personal choice and i urge you to consider my viewpoint carefully.

i have invested 20 years of my life in upi -- 10 of them as secretary-treasurer of the guild -- although i eventually quit in disgust, warning publicly about many of the things that have since transpired with almost frightening accuracy.

i suggest that a vote for this pay cut is a new march down a never-ending trail -- that is, concessions inevitably beget more concessions and it will never end until there is nothing left in salaries or benefits.

sincerely, dan carmichael, washington

upi 11-09-90 04:29 pes