Inquirer Faces Shutdown In Union Spat

PHILADELPHIA - The new publisher of the Philadelphia Inquirer says the newspaper will be out of cash ’by early this fall’ unless a union agrees to a revised contract with its new prospective owners.

Greg Osberg also said the Inquirer, Daily News and Philly.com face the possibility of shutting down because of a cash shortage until the union matter can be decided in court.

’The time for negotiations is over. The company could run out of cash early this fall, and possibly not exit bankruptcy,’ Greg Osberg said at a Monday afternoon press conference.

A new ownership group is trying to assume control of the Inquirer, Daily News and Philly.com, but it is at an impasse with the Teamsters Local 628 after a union vote on Sunday.

John Laigaie, president of Local 628, told the Inquirer on Monday union members wanted Osberg’s group to let them remain in a Teamsters pension fund.

Osberg said Tuesday his group had no intentions of changing its plans.

Osberg acknowledged the media company has ’serious cash flow issues’ and he is talking with bankruptcy judge Stephen Raslavich ahead of Tuesday’s court session.

’Because of the cash flow issues, it may be necessary to purchase the company and close it, until we have arrived at a conclusion of the negotiations,’ Osberg said.

Among the two options available to the judge are another extension of the bankruptcy closing date or a new auction.

Chief Operating Officer Bob Hall said he didn’t think Raslavich would agree to an extension based on what the judge said at the last hearing.

Osberg indicated his group would win in a new auction, and could then impose its own conditions on unions. Osberg said he would honor the deals cut with the 14 other unions, if the company closed temporarily.

But without funding of its immediate cash flow needs, the newspaper group would face immediate payroll and bill-paying issues.

Osberg said that 14 out of 15 unions associated with the media company have signed deals with his group, which is a legal requirement of taking the company out of bankruptcy.

’Their concessions represent $20 million of the $23 million targeted in the new budget,’ Osberg said.

But he said the Teamsters, who represent about 20 percent of the remaining workers, need to ratify a new contract that also contains concessions, or the acquisition may not happen.

Teamsters Local 628 rejected a new deal in a second vote on Sunday.

Osberg’s group wants to change the Teamster’s retirement plan to a 401k-like plan instead of a defined benefit pension plan.

The Teamsters have a Tuesday afternoon deadline to take the deal, or see the Inquirer takeover head back to bankruptcy court.

’Regardless of which options [the court] presents to us tomorrow, we are not going away. We are planning on owning the company,’ Osberg said.

’When we do so, we will then close the sale and possibly impose terms and conditions on all of the unions. Or we will close the sale and we will close the company,’ Osberg said.

The veteran publisher thought any new prospective owner would impose the same condition on the Teamsters.

’Regardless of who the new owner is, they will likely respond with the same actions. We are planning to be that new owner,’ Osberg said.