After six months of negotiations, the Associated Press has reached what it calls a “tentative” deal with the News Media Guild, which represents about 1,200 newsroom and technology employees of the wire service.
The AP said that agreement would provide a greater degree of financial stability for the organization, which has seen many of its dues-paying newspaper publisher members experience continued strains stemming from years of advertising and circulation revenue declines.
In response to the revenue squeeze of its members, the AP has had to lower its fees for U.S. newspapers and broadcasters by $80 million during the past two years. Those reductions in turn caused the AP’s annual revenue to fall to $631 million in 2010 from $748 million in 2008. As a cost-savings measure, the AP cut nearly 740 jobs two years ago and now has about 3,560.
According to the AP, the new contract calls for:
– Freezing a longstanding pension plan, in which monthly payments in retirement are defined. Future retirement contributions would instead go into an employee-controlled account similar to a 401(k). The union ultimately agreed to the pension freeze, and the company said it would increase contributions to the alternative plan for affected employees for eight years.
– In exchange for agreeing to the pension fund freeze, the AP will not to seek an increase in employees’ health insurance payments. Employees would get three raises of 1.5 percent each and improved job security. The contract would cover 33 months and expire at the end of August 2013. Release