Media General goes to furloughs

From MG's internal Web site:

Media General Furlough Program Q & A

1. Are my benefits preserved while I am on furlough?
A. There will be no effect on employee benefits.

2. Why were we given such short notice for the days that have to be taken by the end of March?
A. Our latest financial projections, received just last week, indicated that our first quarter numbers were not on target. If we take no action, and let our financial performance slide, it will be much more difficult to rebuild our strength when the economy improves. These near-term furloughs are necessary to improve our financial performance in the first quarter. An advance program is being offered to help mitigate this impact.

3. How will the advance program work?
A. Advances may be made to both exempt and non-exempt employees. You may request up to 65 percent of the gross amount reduced from your pay. If you need an advance, you must complete and submit an advance request form. The request must be submitted by Monday, March 2, 2009. After this date, no advances will be allowed. Forms to request the advance along with instructions and terms of the advance will be posted to theMeganet by Friday, February 20, 2009. If approved, you should receive your advance within two weeks. The advance must be repaid. Repayment will be through payroll deduction spread over the balance of the year. Additionally, at any time during the year, you may make a lump sum payment by check of the full balance owed. For example, if your gross daily pay rate is $100 (or approximately $26,000 year), then your pay will be reduced by a gross amount of $400 between now and March 27, 2009. You may request up to $260 ($400 multiplied by 65%) as an advance. Assuming that there are 19 bi-weekly pay periods between March 30 and December 27, 2009, a deduction of $13.68 will be withheld from each of the 19 bi-weekly payroll periods to pay back the $260.

4. As a non-exempt employee, can I choose to have my pay reduced in a similar method that is used for exempt employees?
A. No. Government rules require that non-exempt employees be paid according to the actual hours worked. Therefore, your pay must be reduced in the same pay period that you take a furlough day.

5. As an exempt employee, how much will my salary be reduced?
A. Exempt employees will have their annual salaries automatically reduced by 10 days, or approximately 3.85 percent, during 2009. Between now and March 29, an equivalent of 4 days will be reduced (or 1.54% of the annual 3.85% reduction) with the balance of 6 days (or 2.31% of the annual 3.85% reduction) to be spread between March 30 until September 27. For example, an employee with an annual salary of $35,000 has a bi-weekly salary of $1,346.15 ($35,000 divided by 52 weeks multiplied by two weeks). Each day’s pay equals $134.62 ($1,346.15 divided by 10 days). Between now and September 27, 2009, this employee’s pay will be reduced by the equivalent of 10 days pay or $1,346.15. Assuming there are two bi-weekly pay periods left before March 29, each pay period would be reduced by two days or $269.23 (for a total of $538.46 during this period—the equivalent of four day’s pay). From March 30 until September 27, assuming that there are 13 bi-weekly pay periods left before September 27, each bi-weekly pay period would be reduced by $62.13 (for a total of $807.69 during this period – the equivalent of 6 day’s pay).

6. As an exempt employee, with my pay reduced automatically, must I take the 10 days off exactly according to the schedule?
A. No, you are not required to take them exactly according the schedule. Your pay will be reduced regardless of how you actually take the days off. Essentially, for exempt employees, this can be thought of as a pure reduction in pay, but in return for the reduction you may take 10 days off. However, all days taken off will need to be completed by the end of December.

7. Since we are already operating with a reduced workforce, won’t the furlough days everyone will be taking put further strain on our ability to meet customer needs?
A. Furlough days will be scheduled in a way that minimizes business disruption.

8. How much will the furlough save?
A. The company expects to save approximately $9 million.

9. Is Media General at risk of becoming insolvent?
A. No, with this furlough, along with other cost reduction measures already implemented, we are reacting as quickly as possible in order to avoid more adverse financial impact in the future.

10. I know Gannett employees have to take a 1-week furlough this year, all in the first quarter. Why do we have to take 2 weeks?
A. Businesses in all industries and of all sizes are facing this difficult economic environment. Each must determine the best response, based on their own unique set of circumstances. A 10-day furlough is the best strategy for Media General, as our long-term aim is to preserve jobs.

11. What if the economy improves sooner than expected? Is there a chance we won’t have to take all 10 furlough days?
A. The total number of furlough days may be adjusted up or down depending on company performance.

12. Will there be any exceptions?
A. There will be no exceptions, including senior management. The company is asking its unionized and other employees under contract to agree to participate in furloughs in lieu of layoffs.

13. Can I give up a week of vacation instead?
A. No. Employees are paid for vacation days so there is no savings to the company.

14. If an employee is called into work while on furlough because of an emergency, does he or she get paid for that day and then re-schedule the furlough day?
A. Yes.

15. Does the furlough include part-time workers?
A. Yes.

16. Why can’t I do any work while I am out?
A. Federal and state laws require that employees must not work while on unpaid leave.

17. Who will cover my job while I am out?
A. You and your supervisor should discuss how your responsibilities will be handled while you are out.

18. Have other companies done this?
A. Several media companies have instituted mandatory furloughs, including Gannett and Landmark Communications. Companies outside our industry such as the auto industry routinely use furloughs to cut costs or manage inventory.

 

Translation: We in management go to bed at 10 p.m., get up and look at the paper and are believe it is very easy to put out such product. Most of the time spent in sports is wasted time anyway, waiting for games to end with people horsing around. We in management believe it only takes about half your current staff to put out a paper on a daily basis anyway so it will not disrupt anything.

18. Many businesses do this as we found out when Gannett did it. We immediately licked our chops and realized we could copy gannett. The editor that immediately brought Gannett's furlough decision to our attention received a bonus. He then went for coffee with the publisher and sucked up to him some more.

 

Fixed.

 

If newspaper executives ran GM, the reorganization plan they'd offer to the Treasury Department would be "we're going to cut costs by making cars with three wheels instead of four. Also, do brakes need to be QUITE so powerful? Those babies are expensive.

 

This is horrible but the alternative is worse. My feeling is that if this is done in 2009, what are they going to ask for in 2010 ? 20 days?

 

Drip, as a cold business matter, pay cuts are better for the paper than furloughs. Furloughs equals less staff, which equals a shittier product by necessity. In the information game, employees and the product are the same thing.

 

I was talking to a small-paper publisher -- not mine -- the other day and he made the remark that these companies will never be able to cut enough to solve their problems, that their entire plan seems to be focused around reducing costs with little to no effort involved in how to make the revenue stream start flowing again, which is the only way their companies will ever become healthy again.

They're trying to stem the tide ... but to what end? What's the point? They have no plan for the future.

 

Ding. Ding. Ding.

 

This is the line of the day.

 

My early vote for post of the year.