Attention Mike Reed: The battle escalates

Jul 27, 2016 by

Earlier this month United Media Guild business representative Shannon Duffy sent this letter to Mike Reed, the CEO of New Media Investment Group — the parent company of GateHouse Media and its four newspapers that we represent in Illinois:

Dear Mike,

Thanks for taking the time to meet with Phil Luciano and me at the New Media Investment Group shareholders meeting on May 25.

As we told you in New York City, we are concerned about the future viability of the Peoria Journal Star, State Journal-Register, Rockford Register Star and the Pekin Daily Times in the face of eternal wage freezes and newsroom cuts. Excessive cost-cutting is taking a heavy toll in the workplaces where the United Media Guild represents journalists.

That is taking a toll on the news product which, in turn, will cause premature loss of readers and advertisers.  This is troubling to our members who love their craft, their newspaper and their communities.

Recently the State Journal-Register imposed its “last, best and final” offer on our members at that newspaper, which will extend the current wage freeze to nearly 12 years. That seems an absurd working condition, particularly at a newspaper that has helped fund New Media Investment Group purchases and dividend payments with its positive cash flow.

Your employees have never been more important. Newsrooms must innovate and evolve on the fly to compete in a rapidly changing landscape. The business side must do the same in the face of staggering print revenue decline.

Rather than belabor the fairness issue, I’d like to caution you that maintaining an eternal wage freeze at New Media/GateHouse newspapers could cost the company far more in the long run than a relatively modest re-investment in its employees.

Here are some of the inevitable consequences:

  • Declining morale and productivity – and at a time when employee productivity has never been more important.
  • Accelerated churning of salespersons, journalists, editors, publishers and New Media/GateHouse executives.
  • Increased levels of union activism in various workplaces and communities.
  • Economic actions against individual newspapers, targeting subscribers and advertisers.
  • A national corporate campaign against New Media/GateHouse management targeting analysts and shareholders.

Last year, after you expressed your concerns during our phone conversation, we toned down our rhetoric and tried to reach a fair settlement in Springfield without intensifying our public campaign there. But that effort failed, conditions have now been imposed on our members and so here we are, ready to fight on their behalf through all lawful means.

We believe there is real economic value in labor peace. Now, unfortunately, it appears it will be our job to establish the economic cost of a labor dispute.

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Since then, we have seen another example of what happens when a company takes its cost-cutting too far: The Lakeland Ledger will soon vote on whether to unionize. We are asking all of our members to support and others that could arise in the face of GateHouse’s draconian actions.

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