Fallout from Detroit

There is a scene in the movie Braveheart of a battlefield after the fighting is done. Though it was a part of an honorable and important struggle, this particular battle was marked by ineptitude, betrayal, greed, and costly false assumptions. Dead men and animals litter the ground; horrified wives and lost children wander aimlessly; the wails of the abandoned and the angry fill the ears. It's a waste. It's a little like the newspaper strike in Detroit.

It ended on Valentine's Day, 583 days after it began, a strike by six unions against Gannett's Detroit News and Knight-Ridder's Detroit Free Press, and against the single business entity that has run them since 1989 under a joint operating agreement, or JOA. True to form, the two sides did not agree on the terms of the peace. The unions, which led nearly 2,500 people to the streets on July 13, 1995, acknowledged that the walkout no longer made sense. They would continue to push for contracts, but they wanted to come back to work. Immediately.

 Al Derey, the teamster who led the union coalition, made the announcement about "this bold move," as he put it, his voice cracking. Derey portrayed the back-to-work offer as a strategy: should the full National Labor Relations Board eventually agree with its regional director's contention that the papers failed to bargain in good faith, the papers could be liable for back pay dating from the Valentine's Day return-to-work offer. Management and the unions do not agree on how much per day that back pay amounts to, but the unions see a steadily mounting figure as an incentive for management to resolve the issue rather than tying it up in court.

Management said it welcomed the unions' announcement, but at the same time reaffirmed that the 1,400 replacement workers brought in to keep the papers publishing during the strike have permanent jobs. Thus the strikers would be called back only very slowly, when vacancies in the current work force occurred, and on management's terms. (Seven weeks after the strikers agreed to return, 161 of them had been offered and had accepted jobs.)

No good, said the unions. To get all the people back inside who want to go back, they have vowed to continue to ask readers not to buy the papers and advertisers not to advertise in them - extending a drive that has already cost Detroit Newspapers, the JOA agency, dearly. On the unions' telephone, "strike headquarters" has become "lockout headquarters."

 So the strike may be over, but no one could argue that labor peace has arrived.

WINNERS AND LOSERS

It would be hard to argue, too, that anybody really won.

The unions, which suffered embarrassment and frustration in a town where they name highways after labor leaders, lost big. Those who return to work have no contract. Some will never return. As of early April, some 500 fewer full-time non-editorial people were working for Detroit Newspapers than were working the day before the strike. In the newsrooms, the News and Free Press were down 25 and 40, respectively, from 300 and 327.

The company has eliminated at a stroke work rules put in place over the years, often as compensation for jobs lost to new technologies. "Overnight, the unions handed Detroit Newspapers the elimination of work rules and overmanning - stuff that would have taken ten years to get at the bargaining table," says John Morton, the newspaper-stock analyst. "Going on strike was one of the dumbest things the unions could do."

About half the 500 editorial employees represented by the Newspaper Guild local crossed the line and returned before the strike wound down. It is hard to find anybody associated with the struggle who is left unmarked. "How wrenching this was for people - you can't overwrite that part of it," says a former striker. He eventually crossed the picket line.

Prices of Gannett and Knight-Ridder stock remained high throughout, climbing right along with other newspaper stocks. The market shrugged off losses in a pair of papers that may be big but are dwarfed by the size of their owners (Gannett has ninety-one dailies, Knight-Ridder thirty-five, once its recent purchases (see page 14) are final; both have other holdings). And to some extent the market may have cheered the labor efficiencies that result from the chains' success in imposing their will.

But the management side bled as well.

Circulation had already taken a sickening drop since the JOA began in November 1989. That was partly because, in the agreement to become a single business entity and halt head-to-head competition, the News gave up its morning slot and, like afternoon papers everywhere, began to weaken (see chart). Once the strike and circulation boycott began, readership went into free fall. It has apparently leveled out this year, according to unaudited figures, at a combined total of about 600,000 - less than half the combined circulation of the two papers before they joined forces under the JOA. The Detroit News and the Detroit Free Press were numbers 9 and 10 in the nation in circulation in the 1989 Editor & Publisher listing; as of spring 1997 the News is number 43 and the Free Press is 21. Many of those lost readers are likely gone for good.

And many advertisers, too. The New York Times reported that Detroit Newspapers' revenues are down 15 percent. The unions think the figure is much higher, since some companies that do advertise have told union activists that they push for deep discounts to reflect lower circulation. Analysts have put the total strike loss for the papers at more than $100 million; the unions put the figure at $250 million.

There is no way to put a dollar figure on the intangibles - credibility and goodwill in Detroit, where the newspapers faced criticism from civic and religious leaders. Some working-class neighborhoods are still dotted with lawn signs reading NO NEWS OR FREE PRESS WANTED HERE and cars all over the roads still bear bumper stickers reading NO SCAB PAPERS.

As Robert G. Picard and Stephen Lacy, journalism professors at, respectively, California State University and Michigan State University, put it in an article for Newspaper Research Journal: "Technology now allows a company to keep a newspaper open during a strike, but technology also provides readers and advertisers with substitutes. The newspaper can publish, but if large numbers of readers and advertisers leave, the long-term costs of the strike can exceed the short-term gains. If managers continue to hold the mistaken belief that all they have to do is keep a newspaper open, labor and management will find themselves locked in a struggle that ruins them both."

SETTING THE TABLE

 The dynamics that drove the strike started well before anyone sat down to bargain in 1995. To a large extent, they flowed out of expectations and perceptions about the joint operating agreement that Knight-Ridder and Gannett applied for in 1986 and finally won in 1989.

The JOA was a controversial application of a controversial law, the 1970 Newspaper Preservation Act, which essentially allows a city's competing newspapers an exemption from antitrust law on the ground that such an exemption is necessary to preserve two editorial voices. The papers combined business operations, which Gannett controls with a three-to-two vote, while running separate newsrooms. Critics argue that the primary goal is actually the cost-cutting and price-hiking that monopoly allows. Monopoly, says analyst Morton, "is big money. When there are two newspapers in a city, typically one is pretty profitable - 10 percent to 15 percent - and the other not profitable. But a big-city single newspaper can easily do a 25 percent profit margin. And even with a JOA, where you have to publish two newspapers, you can come close to that."

But this pot of gold has proved elusive in Detroit, and the pursuit of it seems almost to bring a curse.

 The rivalry between the stolid, conservative News and the liberal, feisty Free Press is the stuff of journalism legend. By 1986, when Gannett and Knight-Ridder applied for their JOA, the two papers had beaten each other to a pulp. Both were losing money for many reasons, not least the cheap advertising and subscription rates (15 cents a copy for the News, 20 cents for the Free Press) that the papers had been using for several years to try to kill each other off.

The law on JOAs requires one of the papers to be labeled as "failing," and the Free Press was so designated. But Justice Department lawyers were suspicious. As one of them told Bryan Gruley - for his fascinating and well-documented book about the Detroit JOA, Paper Losses - "It was absolutely clear that there were tons of red ink being spilled on those two newspapers' books, but it looked awfully voluntary. It looked like it was a conscious, rational decision" to lose enough to qualify for a JOA.

The unions bitterly opposed the JOA at first, fearing job losses and journalistic retreat, and getting it approved took three and a half hard years. The administrative law judge assigned to the case recommended against it; Attorney General Edwin Meese III overruled him; Meese's approval, challenged, squeaked past the U.S. Supreme Court in the fall of 1989 with a four-four deadlock. But, finally, the money would roll in, wouldn't it?

 When the stock analyst John Reidy predicted a 1991 JOA operating profit of $112 million, Gruley writes, the always-humble Allen H. Neuharth, then the c.e.o. of Gannett, took issue: "What Reidy forgot is that the governance of the Detroit Newspaper Agency is in the hands of the Gannett Company by a three-to-two margin, and 16 percent operating margins are simply not acceptable at the Gannett Company. So, while we appreciate the specifics and the interest, John, we suggest that you revise your numbers upward."

It was Neuharth, it turns out, who had to revise more numbers. Analyst Morton blames the tough newspaper recession that started in 1990; others blame some awful mismanagement: "The nation's two largest and most powerful newspaper chains appear to be accomplishing the impossible," Joseph B. White wrote in The Wall Street Journal in 1990, "having a monopoly, and blowing it anyway." The JOA made no profit at all - until 1994, the year before the strike.

By that time the embarrassed companies were beyond hungry. Meanwhile, in their long battle against each other and then their long joint struggle to get a JOA, the papers had fallen "woefully behind," as Gruley puts it, in modernizing operations, including gaining labor efficiencies. "Only in 1992 did Gannett and Knight-Ridder persuade the Teamsters to agree to a streamlining of the antiquated circulation operation," Gruley writes. "Only in 1992 did they get the pressmen to reduce ‘manning' minimums that had the Detroit papers employing dozens more" workers than comparable papers. Joseph Ungaro, who took over the agency in 1990, told Gruley that the company was "at least ten or twenty years behind the times." Management began to aggressively attend to what it had ignored.

So when contract talks rolled around again in 1995, a destructive dynamic was in place. The unions felt that - after backing the JOA, after giving up some jobs then and more during the tense negotiations of 1992 - they wanted their share of the profit their sacrifices helped create. Instead, management wanted further cost-cutting.

Management complains that its printing plants were still rife with featherbedding, that other workers were getting bogus overtime pay, that it had inadequate control over its delivery system. People had brought "sleeping bags to work because they had nothing to do," one executive claimed. Management says it was demanding job cuts only by attrition and was ready to give generous raises.

The unions say they were willing to address all of the papers' problems, but that it seemed as if management didn't want to bargain. The two sides, the unions say, never even got as far as talking money. Week after week, the unions say, they would bring new proposals, only to be handed back the same "take it or leave it" offer.

 Then came the spark. Company negotiators say they wanted movement at the bargaining table, that they didn't want to get "slow danced" into the fourth quarter, when newspaper advertising flows most heavily. In late June '95 they announced that, after two weeks, they would no longer continue to extend the old contract, as companies usually do in collective bargaining. The unions were stunned. They said they would like to keep talking, and did so briefly, but then said they could no longer bargain without protection or signs of progress.

 At 8 p.m. on July 13, nearly 2,500 employees walked, leaving about 900, mostly nonunion employees inside. For many of the strikers, it would be their last day on the job.

At the guild, the second-guessing began almost immediately. There were heated debates at union meetings. Some members pleaded for the guild to break away from the Teamsters and the other unions and return to work; others argued for strength through solidarity, pointing to examples of newspapers where unions had gone their separate ways and been crushed. The majority insisted that there was no choice but to stay with the strike. The critics said they had walked into a trap.

STRATEGIES

Many in the unions believe that the companies wanted a strike. The companies say they were prepared for one, but in the manner of well-drilled nuclear warriors hoping that they never have to push the big red button. They were indeed prepared. Once the strike began, booted guards from Vance International's Asset Protection Team were immediately visible at the papers' downtown offices, printing plants, and other properties; some 600 of them were in place within about a week. Managers, nonunion editors, and other nonunion personnel began writing stories and running presses. Borrowed workers, editorial and non-editorial, flew in from other Gannett and Knight-Ridder properties around the country. Some 200 drivers were hired from outside contractors. As a result, in more than nineteen months, the papers never missed a day of publication.

The union strategy was to push two boycotts, one aimed at readers and the other at advertisers. In both areas they could claim considerable success. They failed with the third prong of the strategy, however: slowing distribution. During the first summer of the strike hundreds of strikers and their supporters attempted to block the gates of printing plants in Detroit and in suburban Sterling Heights to prevent truckloads of Sunday papers from hitting the streets. In Sterling Heights, strikers regularly clashed with guards dressed in riot gear and with the Sterling Heights police department, whose overtime was being paid for by the newspapers.

On a Saturday in early September of that year the unions got some disheartening evidence of the odds against them, of just how deep into their pockets Gannett and Knight-Ridder would dig to win. As picketers squared off against police and security guards, a roar could be heard overhead. All eyes looked up at the bright lights in the sky. It was an airlift: helicopters loading and flying off into the night. They roared in and out from dusk to dawn. "If they'd pay us what it cost to deliver papers via helicopter," one striker said, "we'd have never gone out in the first place."

CRACKS IN THE LINE

From July 15 through September 18, 1995, the papers published a combined edition every weekday (the weekend edition had been combined at the start of the JOA). There was concern that the papers risked losing their identities if they didn't resume publishing separately. But to put out two daily papers again , management needed to replenish the staffs. So the Free Press sent an ultimatum to all striking guild members: return to work or you will be permanently replaced. They were shocked. This was a paper that for decades had prided itself on a strong relationship with employees, one that, roughly a year earlier, had editorialized in favor of a law banning the use of permanent replacement workers during strikes.

But the ultimatum gave the guild a major problem. On deadline day some three dozen Free Press journalists, including high-profile columnists, crossed the picket line, joining about forty who had already done so. Eventually, roughly half of the 500 striking editorial employees at both papers would go back to work. The other five unions held their members in line, reporting just a handful of defections. In subsequent weeks, management began hiring people it called permanent replacements.

There were still periodic meetings at the bargaining table, but company demands got tougher. Managers said the strike had taught them how to run production with fewer people, so any new agreement would have to reflect that reality.

In the fight for Detroit's hearts and minds, the unions took some ground. To present their point of view, with some AFL-CIO seed money, they started a weekly paper of their own, Detroit Sunday Journal, which is still published on paper and online (http://www.rust.net/~workers/strike. html). City politicians and religious leaders generally supported them. Dennis W. Archer, Detroit's very popular mayor, has contended that the papers have failed to bargain in good faith. Cardinal Adam Maida, leader of the Roman Catholic Archdiocese of Detroit, issued several statements calling the hiring of permanent replacement workers unacceptable.

But moral support does not pay the mortgages. Most strikers have had to supplement strike pay of roughly $150 a week from their unions. A striking Free Press restaurant critic is now a maitre d' in the suburbs; another writer is a clerk at a Detroit pottery shop.

As the strike entered its twentieth month, and with no end in sight, and with the papers, save for the presence of beefy security guards, acting as though the strike were already over, the unions made their unconditional offer to return to work.

THE DAMAGE

By then, a long list of journalists had found work at other publications - The New York Times, The Washington Post, The Wall Street Journal, the Los Angeles Times, The Boston Globe, the Toledo Blade, Fortune, and AutomotiveNews - to name a few. Some are doing corporate work; others teach. Many are talented reporters any newspaper would have a hard time replacing.

Even without those reporters, the News and Free Press "have done some very good pieces; a series in the Free Press on nursing homes just won a big award," says Cindy Goodaker, executive editor of Crain's Detroit Business. "On the other hand, when you replace that many employees, a lot of institutional memory walks out the door." Mayor Archer certainly agrees: "We do not have the same newspaper reports who have sources, who seem to know what many of us are saying as soon as the words are out of our lips," he says. "There's no history."

Detroit Newspapers cites a tangential boon from the strike: increased employment of blacks and women. Before the strike, 16 percent of the agency's non-editorial employees were black, according to Tim Kelleher, senior vice president for labor relations. Now 39 percent are black. But those gains don't extend to the newsrooms. The News stayed about the same; the Free Press lost ground. The Detroit chapter of the National Association of Black Journalists passed a resolution in support of the strikers.

ENDGAME

As strikers trickle back under management's terms, some on the inside wonder about newsroom chemistry. "One of two things will happen," Lekan Oguntoyinbo, thirty-two, a replacement worker previously with Cleveland's Plain Dealer, said to National Public Radio. "Either they will, after a long time, come to the conclusion that I'm a nice guy and will work cordially with me, or they will probably always despise me. And, you know, if they do that I won't blame them. They were fighting for a cause. I hurt their cause."

Others worry that the strike could hasten the day when the city becomes a one-newspaper town. Morton, the analyst, believes that when Gannett agreed to forfeit its morning slot, it was agreeing to the lingering death of the News. But he sees the end as still a long way off, a "death of 1,000 cuts." News editor and publisher Robert Giles says neither parent company has killing a newspaper in mind. "Our long-term strategy is to publish two newspapers. Quite obviously, one of the benefits of this long struggle is that the efficiencies we've been able to put in place guarantee that we will be able to run a very profitable business here with two strong newspapers for the duration of the JOA."

As CJR went to press, both sides were waiting for hints and portents from the wild card in this dispute - the National Labor Relations Board. William Schaub, the NLRB's regional director in Detroit, has already charged the papers with failing to bargain in good faith with the unions. An administrative law judge is currently deliberating that charge. In April Schaub filed another complaint contending that the strikers should be rehired, that they have a greater right to their jobs than the replacement workers have to theirs. Should the law judge's eventual rulings on these charges be appealed (as both sides expect), it will be up to the full NLRB board in Washington to make a final decision. And that decision, too, could be appealed to the federal courts, which could take years.

Not wanting to wait long, the unions are pinning their short-term hopes on another possibility - that the NLRB will seek a federal injunction ordering the papers to take everyone back immediately. Such an order, known as a 10(J) injunction, would likely force management to dump its replacement workers.

Should the unions eventually get all their people back inside and manage to get contracts, they could claim the bitter victory of having survived despite a management that was willing to spend millions to crush them. "The question would go to the publishers, ‘What have you achieved?'" says Louis Mleczko, president of local 22 of The Newspaper Guild of Detroit.

But Gannett and Knight-Ridder, for now and perhaps forever, can point to much lower labor costs. In that sense, the strike, like the bloody battle for the JOA itself, can be seen as an investment. If unions elsewhere lose nerve, the dividends could extend to the chains' other newspapers in other cities, and even beyond Gannett and Knight-Ridder.

It's difficult to hear any cheering in Detroit, though, over all the moans and wails. Two of these companies' proudest newspapers are greatly diminished and a significant part of their city now detests them. The duration of the JOA agreement is one hundred years. It is hard to imagine how the remaining ninety-two can get much worse.

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