|
June 1, 2001 IS
AOL TIME
WARNER FALLING
ON HARD
TIMES? (Or Is That
Only Happening To The Employees Here?) "In
the magazine world FORTUNE just racked up a gratifying string of
wins.... Last year...we blew through every record set in our 71-year
history.... [In 2000 FORTUNE had] a 38% increase in ad pages and a
nearly 50% increase in ad revenue."--John Huey Jr. and Rik
Kirkland, Editor and Managing Editor, respectively, of Fortune "As
you know, the economic slowdown has not been kind to many companies over
the past few months, and magazines, alas, are no exception." --Jim
Kelly, Managing Editor of Time On the very day that the Fortune issue quoted above landed on
Time Incers' desks, in late March, Kirkland announced the elimination of
13 jobs, four reporters and nine writers. Kelly's May 16 memo, quoted
above, announced 16 job eliminations, spread over eight departments. So
let's put this "slowdown" into a perspective that includes
some numbers from last year: According to the AOL Time Warner Annual
Report for 2000, if AOL Time Warner had already been in existence that
year, its revenues would have grown by 11%, to $36.2 billion.
Likewise last year the company's EBITDA (earnings before
interest, taxes, depreciation and amortization – or "cash
flow" in the currently popular phrase) grew a remarkable 19% to
$8.4 billion. And in
spite of the "economic slowdown," the company's revenue is
projected to grow 12%-15%, and projected growth in EBITDA for this year,
as repeatedly promised to Wall Street, is 30% -- that's on top of last
year's record cash flow! AOLTW
management has set outrageous targets for this year to surpass last
year's growth, and has stuck by them.
It sure doesn't seem like management believes there's much of an
economic slowdown. If
there is any slowdown, it certainly won't be top management's salaries
and stock options that will suffer. Gerald Levin received about $153
million in stock options for last year.
According to the Time Inc. com website, Steve Case has cashed in
about $263 million in options already in 2001, since the merger was
approved. Do you expect to
see any slowdown there? The
initial post-merger budget cutting – eliminating or reducing staff
snacks and sodas, reducing book- and record-reviewing fees at People,
streamlining closing-night meals -- now seems an action just to prepare
us for the real blow: eliminating the jobs of the people who write the
magazine and put it together – the correspondents, picture editors,
designers, imaging people, reporters and more. The
work these staffers do is still needed, of course. Perhaps new
quasi-employees will be hired as "freelancers,"
"stringers" or "project" employees, possibly veering
into the same violations that got the company into trouble with the
Department of Labor just a few years ago. In that case management will
try to avoid providing benefits for these non-staff workers – no
medical insurance, no pension or stock options or profit sharing, no
paid vacation. Or perhaps
the employees left behind will have to take on more tasks to make up for
lost colleagues. In its
latest attack, as far as the Guild knows, management is targeting only
Guild-covered employees for elimination.
Over the years management has been fighting the Guild by
repeatedly downsizing the magazines we cover while spinning off new
magazines that are line-extensions of the older titles --
but management insists that these employees not be covered by the
Guild unless they vote for the Guild in a special election. In
fact, management has fought long and hard, fighting arbitration after
arbitration to keep employees of new magazines out of the Guild. Why? Because
over the years the Guild has won large gains for Time Inc. employees.
These include annual wage increases, up to six weeks of paid
vacation per year, sabbaticals, 10 paid holidays in addition to 2
personal days per year, night-work bonus pay and car service for those
working at night, to name just a few. Most of
all, the Guild has consistently fought to defend the rights of employees
in the face of unfair practices and cutbacks.
Our severance- and-notice-pay packages make it expensive to lay
off any employees. Because
of the Guild, management has to think carefully before cutting
employees. Without
the Guild, life for the new company's new management would be much
easier. In recent months we
witnessed how non-unionized employees at CNN were abruptly fired and
told they had only a few hours to pack up their things and leave.
They had no organization to negotiate for better severance
packages. They had no
seniority language to enable longtime employees to hold on to their
jobs. They had no power to
resist the monster AOL Time Warner. If we
want to defend our jobs, our careers and our benefits, for ourselves and
for future employees, it is up to us to recruit our fellow employees to
build a stronger union. If
we allow management to pick us off one by one, the Guild's influence
could dwindle -- jeopardizing the jobs, the good pay and the good
benefits of all who remain. This
latest round of job-elimination cuts will not be the last, despite the
company's just-distributed pension-enhancement packages, which were not
negotiated with the Guild and are the subject of ongoing discussions. It may be only the beginning of cuts dictated by the new AOL
management of this company, which is obsessed by quarter-to-quarter
targets. If we
stand together, it will be much harder to eliminate those who produce
the magazines, the source of the profits in the first place. Many
concerns have been raised by employees who have witnessed the recent
cuts or been affected by them. Many are wondering what is the best
decision to make as an individual under the given circumstances.
Others dread what will be the content of the next memo from the
Managing Editor. The Guild encourages you to voice these or any other concerns, questions or ideas to any Guild rep or to John Shostrom, Unit Chair (212-522-3965); Edith Fried, Grievance Chair (522-3867); or Alex Blanco, Membership Chair (522-4187). # # # # # # #
|