October 30, 2001

NO DEAL

Guild rejects RAM's buyout offer; contract better for most members    

           After several days of talks, RAM managers failed on Tuesday to deliver a buyout package that makes it worthwhile for departing members to give up their right to be rehired. 

Guild negotiators expressed serious doubts that the management package – which offers as little as two months of health care coverage beyond the minimum required by the contract – will find enough takers to cut the 24 jobs management says it wants to eliminate by the end of the year without resorting to involuntary layoffs. They told RAM negotiators the Guild would not endorse or recommend it. 

The package, which is open to most Editorial, Technical and Sales Administration employees with at least five years of service, is far worse than any previous buyout offer. The Guild believes the vast majority of members would be better off passing on it. 

“We can’t even hold our nose and recommend this,” New York Guild President Barry Lipton told management negotiators at the end of the talks. 

The management package presented will probably attract only a few applicants who are very close to retirement, he said. Beyond that, he added, “We don’t think you’re going to make your numbers.” 

           If the RAM package fails to entice enough employees out the door and management still wants to make its cuts, the company will have to follow our contract.  That means seeking volunteers to accept severance of two weeks per year or partial year of service plus 19 weeks – and remaining on a three-year rehiring list (those accepting management’s buyout would give up their rehire rights). If not enough volunteers come forward the least senior employees would be laid off. 

UNHEALTHY PLAN BENEFITS FEW 

Relatively few of the 570 Guild-covered employees would get enough from management’s offer to make it worth giving up their right to be rehired. For departing employees not near retirement age needing more than two months to find another job in a slowing and uncertain economy, management’s enhancements will not even be enough to pay for health insurance during the entire job search. 

When negotiations ended Tuesday afternoon, managers insisted their offer – which asks members to sever their ties with Reuters for very little compensation beyond what the contract requires – is final.  Guild officials refused to endorse it. 

RAM OFFER WORSE THAN ANY OTHER

           One especially odious feature for management’s offer was extending paid health care for only two months for employees under retirement age. 

“Even employers that were literally in bankruptcy have recognized a need to extend health benefits for a substantial period of time to employees that are being bought out,” said Lipton, who has negotiated several buyout deals with other companies. 

Despite the Guild’s refusal to accept the deal, management negotiators said they plan to offer it to employees anyway. 

For people with at least 10 years of service, the management package offers extra severance of between two and eight weeks pay. 

“For people with 20 to 25 years of experience the numbers get very large,” Reuters America Managing Editor Janie Gabbett said. 

The Guild had sought severance of at least three weeks pay per year or partial year plus 19 weeks plus an extra three to six months of extended medical coverage for employees who did not qualify for retiree medical coverage. 

The company did agree to a Guild request to make it easier for employees to qualify for retiree medical coverage by setting the minimum requirements at age 55 years plus years of service that adds up to at least 75.  This is an improvement over the contract, which awards retiree health benefits only to employees 60 years of age or older whose age plus years of service adds up to 80. 

BIG STEP DOWN FROM 1997 EDITORIAL BUYOUT 

Reuters Guild Unit Chairman Peter Szekely said the management offer is inferior to the last major buyout package for Editorial employees, negotiated in 1997, when the Internet economy was booming and many employees were unafraid of taking the extra money and looking for new opportunities in the dot-com world. 

            “We were not crazy about the 1997 deal,” Szekely said. “But you met a few of our concerns and in the end we accepted it.  This is a step down from that, and not even a small step down.  It’s a ‘watch-that-first-step’ down and into an elevator shaft.” 

            The management representatives said they couldn’t offer too many enhancements because this time the cuts are “RAM-wide.” It is expected that non-Guild employees will be offered similar benefits. 

As for our own members, the Guild advises that it would be far better to sit out this offer. Members who don’t qualify for retiree medical coverage would be better off waiting to volunteer for the contractual severance WITH its rehire option that management MUST offer us when this paltry package fails to get them the payroll savings that London is demanding.

#######

opeiu:153

10/30/01