The Newspaper Guild yesterday overwhelmingly approved a new five-year contract with the New York Times, removing at least one potential headache for newly installed CEO Mark Thompson.
The past contract expired 20 months ago, and negotiations had grown increasingly tense.
The tentative pact was hammered out a week ago Sunday as Hurricane Sandy was bearing down on the city. Support seemed to be eroding in recent days as some union members looked at the fine print in preparation for yesterday’s vote.
In the end, the contract, which unifies the print and digital members of the Guild under one contract for the first time, was approved 521 to 64.
The vote was split into workers on the paper, who approved the pact by 472 to 43, and digital workers, who approved the pact by a 49 to 21 margin.
The contract will end the defined benefit pension plan — which pays a set amount for life to each retiree — in favor a new adjustable pension plan which will keep pension costs under control by adjusting its accruals annually. In a sense, it will function as a cross between a typical 401(k), which updates constantly depending on the market, and the old set-for-life pension plan. The annual accrual under the new plan can rise or fall depending on the market that year, but once a person retires, the monthly payout amount will be set for life. The company recently said its pension liabilities were under-funded by $300 million, and it has been pushing to have the pact ratified by Nov. 15 so it could take a fourth quarter write-down.
The contract provides no retroactive pay hike, although it will offer in March 2013 a one-time “bonus” equal to 3 percent of a year’s salary. The bonus will not figure into the base salary. Thereafter, the pay hikes will be 2 percent a year over the final three years, with the potential for some incremental bonus hikes, which will not be tied to the base salary.