1991 Reuter Report on Guild Givebacks

Here's a Reuter's story from Dec. 6, 1991:

NEW YORK, Reuter -- Financially strapped United Press International Inc. and the Wire Service Guild said Friday they have tentatively agreed on contract changes to help the 84-year-old wire service survive.

The modifications cut wages and severance pay in the contract that expires June 30. However the terms are better for employees than interim changes which had included suspension of severance payments as ordered by a federal bankruptcy judge in September.

"These modifications will give UPI the cost savings and operational flexibility that we need to put the company on an even keel and reach the operational break-even point by the beginning of the new year," Pieter VanBennekom, UPI's president and chief executive officer, said in a statement.

The tentative agreement must be ratified by the union's membership and approved by U.S. Bankruptcy Judge Francis Conrad.

If the accord had not been reached UPI would have pursued efforts to reject the collective bargaining agreement. If Conrad had allowed that to stand UPI could have fired all union workers.

A trial had been set for Saturday.

Kevin Keane, Wire Service Guild president, said without the agreement the union would have had "to go back to court and roll the dice."

Washington-based UPI, which is owned by New York's Infotechnology Inc., filed for Chapter 11 protection from its creditors Aug. 28. Conrad then gave UPI permission to stop paying severance temporarily to dismissed employees and to continue any pay cuts needed to remain afloat.

He ruled that UPI could pay workers 80 percent of their salary and could replace them with freelancers until there was a ruling on whether to reject the collective bargaining agreement.

The tentative agreement reached Friday reduces severance entitlements to 80 percent of that specified in the union contract and permits the company to spread those payments out over a three-year period. Wages in the bargaining agreement would remain at the 80 percent level.

In addition to streamlining operations, UPI is developing a new services for broadcast stations and newspapers, the company said. VanBennekom said UPI's primary focus now is to break even by the end of the year.