Company readying buyout offer to Guild members in effort to save $1.1 million

Buffalo News management has informed the Guild that it intends to offer buyouts to Guild-represented employees.

News management, in a meeting with Guild leaders Tuesday, shared a conceptual buyout offer that is similar to what was offered a year ago, which involved cash payments that start at $60,000 and scale upwards, depending on length of service at the paper.

“It’s just a concept,” said Dan Farberman, vice president of human resources. “We want to take the approach that has the greatest chance of success.”

Management is seeking total savings of $1,077,000 from Guild ranks. The company’s buyout concept anticipates 18 employees accepting a buyout, at an estimated savings of $800,000. The News said it would likely seek the balance in economic concessions.

Guild leaders responded by saying they have no appetite for making economic concessions beyond what was agreed to last year and instead countered with three buyout options that emphasize enhancements to the pension plan. A combination of concessions, buyouts and layoffs saved the company about $2.9 million last year.

“It seems as though almost everyone who might accept a $60,000 buyout has already done it,” said TNG representative Marian Needham. “We believe the key to getting people interested in a separation package now is to include a pension enhancement that will allow people who are near to retirement to leave without significant penalties.”

The Guild suggested an option that would give employees 10 years of pension credits they could apply to their age and/or years of service and raising the maximum years of credited service from 30 to 45.

For example, a 59-year-old employee with 26 years of service could apply six years to his age and add another four to his years of service and retire with a full pension.

The Guild suggested modifying the cash buyout offer equal to 1.5 times an employee’s salary, with a minimum payment of $60,000. For example, an employee with a base salary of $50,000 would be offered a buyout of $75,000.

A third option suggested by the Guild would have The News provide three years of health insurance at company expense.

The company does not have to bargain a buyout package with the union, but has agreed to exploratory discussions. Management emphasized Tuesday that it has not settled on a particular buyout offer and was open to considering the Guild’s ideas.

The company is expected to finalize an offer within several weeks, after further consideration of the options and discussion with the Guild.

Both sides described the meeting as productive and expressed their desire to work cooperatively.

“This was a good discussion,” Needham said. “We’re optimistic that management will take our suggestions seriously and offer separation options that really work for our members.”

Farberman said, “We’d like to avoid a confrontational approach with the union. We’re not spoiling for a fight.”

Company officials said they would prefer not to lay off employees, which would involve management invoking the “remedy the (economic) stability of the newspaper” clause – also known as the “no-layoff clause” – in the Guild contract. But management has refused to rule it out altogether.

Guild leaders have said such a move could trigger a grievance and arbitration challenge from the union.

The company is seeking to cut expenses by $5.7 million across all departments in the face of declining profitability over the past decade. Pre-tax profits dropped from $19 million in 2008 to $15.3 million last year. While profits dropped last year, they were considerably higher than the $6 million originally forecast by the company.

Company officials are projecting profits this year of between $5 million and $10 million, depending on their success in trimming expenses and slowing the decline in advertising revenue.

Guild representatives at the meeting Tuesday included Needham, President Pat Gormley and Vice President Dick Fay, both of circulation, and Jim Heaney from editorial. They later met with a steering committee that includes representatives from all departments.

Managers present included Farberman, News President Warren Colville, Comptroller Bryan Donohue, Circulation Vice President Rich Williams, Legal Counsel Larry Bayerl and Benefits Manager Rick Walker.