The Newspaper Guild is trying an unusual strategy to save jobs at the Pioneer Press and eight other Knight Ridder newspapers: It wants to help buy the newspapers, then set them up under employee ownership or as part of a new, "employee friendly" company.

Knight Ridder ? the nation's second-largest newspaper chain ? is considering selling its 31 daily newspapers, which include the St. Paul paper, the Duluth News Tribune and the Grand Forks Herald. The chain announced its intention to pursue "strategic alternatives" in November, after key stockholders kept grumbling about the company's stock price and profit picture.

The Guild got involved because any new owner planning to "enhance shareholder value" is likely to cut jobs, wages and other costs, said Darren Carroll, an international representative for the Guild, which is part of the Communications Workers of America.

A "scenario analysis" by the investment firm Morgan Stanley says a middle-of-the-road approach would cut nearly 900 jobs and $150 million in costs from the Knight Ridder papers. An "extreme" approach would cut closer to 1,100 jobs and $347 million in costs.

In comparison, Knight Ridder cut 1,700 jobs in 2001 as it slashed payroll by 10 percent.

A different model
"We would like to find a better path," Carroll said, one that does not involve "dramatic cost-cutting," but finds a "forward-looking owner willing to invest in the business."

CWA represents nearly 2,900 employees at the nine Knight Ridder papers it is targeting, Carroll said; the Teamsters represent about 1,700 more. The Guild, working with two financial advisers, is trying to find media companies or private investors willing to run the newspapers in a way that respects collective bargaining and labor agreements, and also to invest in producing top-notch journalism for their communities, Carroll said.

Though Knight Ridder says it will sell its papers only as a group, not piecemeal, the Guild believes it's possible to arrange with a buyer to spin off the union-represented papers after the sale takes place. The Guild itself would not be an owner, but is working to connect potential equity partners ? possibly including union pension funds ? to finance a secondary purchase. "We're making our interest known now so we can be part of the discussion," Carroll said.

Pioneer Press staffing depleted
It's not unusual for daily newspapers to have profit margins of 20 percent or higher. But declining circulation and increased competition for advertising are making it harder to reach those targets.

The Pioneer Press ? one of the few Knight Ridder papers that competes directly with another daily ? has a profit margin of only 10 percent, Morgan Stanley estimates. That, Carroll says, makes the St. Paul paper especially vulnerable to cost-cutting.

But things are already bad at the paper, said Mike Sweeney, executive director of the Minnesota Newspaper Guild Typographical Union, which represents about 480 Pioneer Press workers.

Staffing is decimated, he said. The paper lost nearly 100 workers as part of the Knight Ridder reductions in 2001, and is not hiring new employees except in advertising, he said.

"They just haven't been filling jobs," Sweeney said. "The place is a mess, an absolute mess."

Staffing is so depleted that, in many departments, there aren't enough people to cover if someone gets sick, he said.

"They're banging the hell out of people right and left. They're way overworked. They're holding people to standards that just can't be met. They've created an atmosphere of complete demoralization and complete stress."

If a new owner comes in who's interested only in the bottom line, Sweeney said, "there will be no Saint Paul paper to speak of." Instead, he said, the paper will be little more than an advertising shopper.

Adapted from The Union Advocate, the official newspaper of the St. Paul Trades and Labor Assembly. E-mail The Advocate at: advocate@stpaulunions.org