Vol XI, No. 23TNG/CWA Local 31041Feb 21, 2000

Did circulation brass get theirs?

The company pays 'Profit performance bonus' to non-Guild workers of 2.75 % But it skips gainsharing or performance bonuses for Guild workers.

And does so despite Belo Corp's $178 million profit and praise for The Journal's "outstanding performance."

Launching another mean-spirited attack on its 500 Guild workers, the company last week distributed 2.75 percent bonuses to some employees - but not those in the Guild.

The company also declined this year to pay ''gainsharing'' under the Guild contract, which in the past has resulted in both pay scale boosts and cash bonuses.

The Guild will challenge this maneuver. The union will argue, in part, that the company imposed the profit performance bonus program on the union when it instituted obnoxious demands, like taking away one paid holiday. Thus, Guild believes its members should get bonuses, too.

The union sees the bonus ploy as another attempt by the company to punish the Guild, with the newspaper abusing its workers and stepping on the contract.

Rather than rewarding Guild members for their role in what the A.H. Belo Corp. has described as a highly successful year for The Providence Journal, the company is trying to sanction the Guild for demanding a fair contract.

CONSIDER THE MERITS of the situation.

Both the Belo profit performance bonus plan and the Journal gainsharing program are designed to encourage workers to help the company increase its profits.

Belo and the Journal had a good year.

Corporate profits were $178.3 million, which is more than double the previous year figure of $64.9 million.

Earnings of the Journal are folded in to "newspaper publishing" category. The newspaper division had earnings from operations of $177 million, compared to $138.3 million the year before - about a 28 percent increase.

What's more, Robert W. Decherd, Belo chairman, singled out the Journal as a top performer.

"The Providence Journal . . . had a very strong fourth quarter and outstanding performance for the year."

Given this praise, the Guild bargaining unit is no less deserving of a raise than other workers - including those making a mess of circulation and jeopardizing the paper's future.

Guild members are working hard, still coping with understaffing left from the downsizing of the 1990s, wrestling with new technology, fashioning a "world class" advertising program, winning press awards.

But the company has chosen to make a mockery of its own programs to reward workers for making the company profitable.

AND IT SHOWS WHAT HAPPENS when the company holds the cards.

Even though these bonus programs are dressed up as profit-sharing incentives, the company so controls the mechanisms that it can give a bonus if it feels like it, but not bestow one if it's not in the mood.

Take gainsharing:

Each year, the company (not the Guild) sets a financial goal. The goal is a type of profit, defined as EBIT (earnings before interest and taxes).

If the goal is reached, 1 percentage point is added to the annual pay increase: a 2 percent hike scheduled in the contract becomes 3 percent. Further, cash bonuses are paid if the goal is exceeded - as much as 4 percent of base pay if EBIT is 25 percent above the goal.

THE CATCH is that the company sets the goal.

The company can set the target so high that it can't possibly be hit.

In fact, for 1999 - the year in which it would enter into negotiations with the Guild - the company set a record EBIT goal: $30.7 million. That was a huge increase over the 1998 goal of $23.8 million, and a sizeable jump over the actual 1998 results of $24.6 million.

Incidentally, it's still not clear what happened in 1999.

That's because the company has yet to disclose the 1999 EBIT results, despite requests from the Guild for the information, and even though Belo in January released its annual corporate earnings.

NOW, A WORD ABOUT the "profit performance bonus plan" that the company would substitute for the current gainsharing program in the Guild contract.

Just like gainsharing, the performance bonus program is completely company driven. Here's the proposed contract language.

"Bargaining unit employees shall be included in the company's Profit Performance Bonus plan. The decision to pay the bonus and/or the amount of a bonus shall be within the sole discretion of the company and not subject to contractual grievance procedures. If the company decides to pay a bonus, it shall be paid to bargaining unit employees on the same basis as other employees of the company."

IF THE COMPANY were playing by the rules, here's what a 2.75 percent bonus would mean to the Guild:

  • Reporters paid $50,887 a year would get $1,399.

  • Porters now earning $26,282 would get $722.

It would be interesting to know what bonuses were paid to the bosses who have fouled up the circulation department, and perhaps cost the paper hundreds if not thousands of once loyal subscribers.

What the company has done, by granting a bonus to non-Guild workers and withholding a bonus from Guild members, is underscore why we need a contract, and one that spells out benefits as exactly as possible.

Simply put: the company can't be trusted.

When it has complete freedom to administer a program like profit-sharing, it abuses its power.

You have to ask: besides outstanding profits, what kind of numbers could the company be looking at for it not to pay gainsharing or some other kind of incentives to the people responsible for "outstanding performance?"

The answer, of course, is 354 to 28.

Those are the numbers earlier this month by which the Guild turned down the company's proposed contract.


DATE: Wednesday, Feb. 23
TIME: Noon
WHERE: Journal Bldg. 75 Fountain St.

Copyright © 2000 The Providence Newspaper Guild
TNG/CWA Local 31041
270 Westmister St., Providence, Rhode Island 02903
401-421-9466 | Fax: 401-421-9495