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UPI to Renew Bid to Void Union Contract

September 5, 1985

WASHINGTON (AP) _ United Press International, stymied in its latest attempt to obtain wage and benefit concessions from the Wire Service Guild, will return to federal bankruptcy court with a new request for termination of the union contract, a company spokesman said Thursday.

David Wickenden said UPI will file a petition with U.S. Bankruptcy Judge George Francis Bason Jr. in the next few days to void the three-year contract that expires April 26, 1986.

″If and when they do file (to break the contract), then our commitment to defer the strike vote is ended and we will continue the strike process,″ William Morrissey, president of the Guild, said Thursday. ″We have an agreement in force. We intend to see that it is lived up to.″

The Guild’s previous strike vote was halted when the union and UPI entered discussions with the aid of a federal mediator.

In a message to UPI employees issued late Wednesday night, UPI chairman Luis Nogales declared ″the company will be in peril″ unless it wins the wage and benefit concessions it has sought unsuccessfully since June.

Wickenden made a copy of the UPI statement available to The Associated Press.

UPI has said contract concessions are necessary to make the company more profitable and attractive to prospective buyers or investors. The Guild says the employees have sacrificed enough, and that the company could cut costs elsewhere.

The Guild, in a lengthy statement made available on Thursday, said ″the union will discuss its collective bargaining agreement only with a viable purchaser,″ not with current UPI managers.

The statement began: ″Leaders of the Wire Service Guild spent eight hours Wednesday meeting with UPI executives. One thing was absolutely clear - UPI’s ‘management team’ has a goal which eclipses all others: retain control over the company.″

″If he wanted to sell, Nogales would not be pursuing concessions designed to cut employee wages and benefits in October, November, December, January, February and March,″ the statement said.

After UPI first petitioned to void the contract, leaders of the Guild, which represents about 750 UPI editorial employees, responded by agreeing to ask members for authorization to call a strike if Bason approved the request.

Both sides backed off when Bason referred the dispute to federal mediation, but six days of talks under the auspices of the Federal Mediation and Conciliation Service collapsed Aug. 22 without any sign of a settlement.

Bason has been overseeing UPI’s efforts to put its financial affairs in order since April 28, when the company filed for protection against creditors under Chapter 11 of federal bankruptcy law.

UPI opposes full restoration of employee wages, as agreed upon last September when the union accepted a temporary, 25 percent pay cut. The company also seeks reductions in medical benefits, pension liability and dismissal indemnity, together with a 40-hour work week for all employees, some of whom now work a 37.5-hour week.

No progress was reported from Wednesday’s meeting, which came at the request of federal mediator Edward McMahon, Wickenden said.

″The sole reason we are asking for further concessions is to keep the company solvent,″ Nogales was quoted as telling union negotiators Wednesday. ″The concessions we have asked for are absolutely necessary. One way or another, I’ll do whatever it takes to keep the company solvent.″

Nogales said that if the judge approves termination of the contract, ″I will be willing to immediately sign a new contract with the union, with the modifications.″

Bason has called a hearing next Monday for a status report on the contract dispute from McMahon, to be preceded by a private meeting with union and management negotiators in his chambers. The company had quoted McMahon on Aug. 22 as saying that ″the mediation process has been exhausted.″

UPI has set a Sept. 16 deadline for interested investors to submit preliminary offers to buy the wire service. After reviewing the preliminary bids, two New York investment firms appointed by Bason to solicit bids for UPI hope to receive more detailed, formal purchase offers by the first week in October, says UPI vice president William K. Adler.

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