Here's a June 19, 1985, UPI story by Gregory Gordon about the company turning a profit during its first month under chapter 11 bankruptcy protection:
WASHINGTON (UPI) -- United Press International says it recorded a $378,000 operating profit in its first month under chapter 11 bankruptcy protection, the company's best monthly performance in more than two decades.
Despite the disclosure made in a profit-and-loss statement to be filed with a federal bankruptcy court today, the company said that without a six-month wage freeze UPI's financial turnaround might be impossible.
News of the operating profit came as negotiators for the company and the Wire Service Guild Tuesday opened two days of negotiations in New York to discuss UPI's proposals for new employee contract concessions.
Dan Carmichael, WSG secretary-treasurer, said company negotiators told the union UPI still is "marginally profitable," but its survival would be in jeopardy if employees fail to accept a six-month wage freeze at 90 percent of last year's salary levels.
The current pay scale amounts to about $27,500 a year for a top-scale staffer, not counting overtime or differential pay for night and overnight work.
The company also has asked its 900 union-covered employees to assume a larger share of medical coverage, to return to a 40-hour work week, to accept a 10-month suspension in company pension fund contributions, to agree to reductions in severance entitlements and to agree to remove telephone engineers from Guild jurisdiction.
Carmichael said, "We discussed a wide range of problems and tensions between the parties" during the day-long session. He said the union "questioned the accuracy of the company's claimed savings from each of the six proposed contract modifications.
Last fall employees accepted a 25 percent wage cut to keep the 78-year-old wire service operating. Thus far, 60 percent of those reductions has been restored in quarterly phases.
UPI seeks to delay for six months the 5 percent restoration due July 1, and to eliminate the restoration to full 1984 salary levels scheduled for October.
Carmichael said the Guild asked UPI negotiators to provide detailed financial information "to enable the union to intelligently evaluate the company's proposals and bargain on them."
UPI chairman Luis Nogales called the operating profit for the period from April 29 to May 31 "a proud achievement for the entire staff of UPI," stressing it was the seventh straight month of profitability despite a crush of prior debt that forced the chapter 11 filing.
"We have established that this company is a hell of an investment," Nogales said. He said he is negotiating with some parties "very interested in purchasing the wire service."
Nogales said, however, that whether UPI can remain profitable "depends on various factors," including news industry receptiveness to a proposed voluntary 9.9 percent rate hike, and negotiations with the Guild.
He said industry response to the rate hike has been so strong to date that the company may generate nearly $4 million in additional revenues this year.
Nogales declined to discuss the negotiations with the union in detail, but said, "We will do what is prudent and what overall is best for this company and the employees."
He said any final decisions must be weighed in concert with the company's need to "recapitalized" and to "position itself." But he also said, "You've got to weigh what the employees have been through."
"We can't afford momentary relief if it's detrimental to the overall recapitalization," he said.
UPI president Ray Wechsler said the May operating profit far outdistanced the performance for the fourth quarter of 1984, in which UPI recorded a $1.1 million profit -- in large part due to the 25 percent employee wage cuts.
He said the performance for the first month of chapter 11 was "without a doubt" UPI's best in two decades.
During the negotiations, Carmichael said, the company's four-person negotiating team claimed that if the scheduled 5 percent pay hike is honored, UPI "would once again fall into a situation where expenses exceed income."
Company negotiators warned that in the coming days, UPI will be required to decide whether to retained leased bureau space at scores of sites nationwide, including paying all back rents, he said.
Carmichael said the company told the union that postponing the pay hike would save $75,000 to $80,000 per month for union-covered employees and $140,000 for all employees.
He said UPI officials labeled the current medical plan for union-covered employees a "Rolls Royce" that could be modified to save money.
Bobby Ray Miller, UPI's vice president for personnel, told the union negotiators that in returning from a 37 1/2-hour to a 40-hour work week the company also is proposing eliminating overtime pay for work in excess of eight hours per day until 40 hours have been worked, Carmichael said.
UPI 06-19-85 09:56 ACD