Sun-Times bidders want workers to give up more

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: Sun-Times Media Group: Bidders want workers to give up more : Plan from Jim Tyree's investment group calls for unions to agree to permanent compensation cuts, other concessions : By Michael Oneal and Julie Johnsson : Tribune reporters : September 10, 2009 : The painful process of extracting Sun-Times Media Group Inc. from bankruptcy court started in earnest on Wednesday. : Less than a day after an investment group led by Chicago financier Jim Tyree agreed to spend more than $25 million to rescue the cash-starved parent of the Chicago Sun-Times, employees began to learn the steep sacrifices they will have to endure to make the deal work. : Letters went out to union leaders officially calling for cuts in compensation, elimination of some work rules and the likely loss of pension benefits, said Sun-Times Media Chairman Jeremy Halbreich. : Non-union employees got word that they their pay will be cut sharply, with any wages between $25,000 and $100,000 dropped by 8 percent and amounts above that slashed by 11 percent. : Halbreich said the Tyree deal is conditional on making the concessions stick, and he reiterated earlier warnings that without the deal, Sun-Times Media will run out of cash and collapse. : "Without holding a gun to anybody's head," he said, "everybody will understand what's at stake here." : Despite the threat of liquidation, it remains uncertain that the company's unions will agree to all of management's terms. : Tyree has given Sun-Times managers just 20 days to win approval for a set of demands designed to freeze compensation costs for three years, eliminate pension risk and improve worker productivity. : Union leaders will be asked to lock in the "temporary" 15 percent cuts in compensation that they agreed to after Sun-Times Media filed for Chapter 11 protection on March 31. : Each of 18 bargaining units arrived at that 15 percent level differently by juggling cuts in wages, pension payments and other benefits. They will be allowed to reshuffle those cuts if they want, Halbreich said. But they will still have to deliver the 15 percent total. : Halbreich said the new Sun-Times Media also will leave behind millions in pension obligations, meaning new company contributions will stop and the bankruptcy estate will be left holding the bag for plans that are underfunded. : The government may end up taking over some of the plans. But participants will likely see a sharp decline in the payouts they were counting on for retirement, Halbreich acknowledged. : He said, however, that the Tyree group intends to fund a new 401(k) plan at the same level they would have been contributing to the pension plans, given each bargaining unit's 15 percent formula. : Management will argue that workers will end up with compromised retirement benefits whether the company lives or dies. But if they agree to Tyree's terms they will at least have jobs and a new retirement plan. : Halbreich said he would take a salary cut of about 20 percent. : Work-rule changes, rather than pay cuts, could end up being the most contentious issue, sources said. Workers worry that the company may consolidate operations, eliminating jobs and changing the duties of others. : That might require compromising basic labor principles such as seniority, guaranteed severance and restrictions on the use of freelancers, these sources said. : Some company sources said workers with enough seniority may see more value in preserving months of severance pay than in making a bet on their long-term prospects under Tyree. Halbreich declined to discuss details of the work-rule issue. : The campaign to win over the unions got off to a rocky start when Sun-Times officials failed to deliver details of Tyree's demands to union leaders on Wednesday as they had promised. : Given the sensitivity of the matter and the time constraints imposed by Tyree, Tom Thibault, executive director of the Chicago Newspaper Guild, said he was exasperated Wednesday when all he received was a general letter exhorting union leaders to work together with management. : "If there's a time element here, obviously it's not critical to them," Thibault said. : Tribune media columnist Phil Rosenthal contributed to this report.

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