Wage, Benefits Cuts Sought : Troubled UPI Asks Judge to End Labor Agreement

United Press International asked a federal bankruptcy judge Saturday to terminate its labor contract covering 750 domestic employees, arguing that it must impose wage and benefits cuts to attract a buyer.

UPI Chairman Luis Nogales chose the action after the Wire Service Guild gave no hint that it would accept any of the changes the company proposed on June 10 and later softened.

In court papers, the company said the concessions, worth about $1.5 million, are vital to achieving a sale that would assure the survival of the 78-year-old wire service.

Would Boost Profits

UPI said in the documents that the wire service expects total revenues of $93 million to $95 million in 1985 but will realize “at best” a profit of $500,000 to $1.8 million, without the contract modifications.

The documents said the modifications would boost the profits by about $1.5 million.

Guild President William Morrissey has said UPI has yet to demonstrate a need for the changes, as required under the federal bankruptcy code.

The company has asked union employees, who accepted a 25% pay cut last September, for delays in the phased restoration of those cuts that would cost a typical top-scale staffer about $1,350 over the next nine months.

UPI wants to set wages at 92.5% of September, 1984, wage levels through December. Since the 25% cut, wages have been restored to 95%.

UPI also wants employees to accept reduced pension fund contributions and severance entitlements, a 40-hour workweek instead of 37 1/2 hours, and medical coverage identical to non-union employees.

The code allows the judge 14 to 21 days to hold a hearing on the motion, and another 30 days to rule. Should the judge abrogate the contract, Nogales has said he will honor all its terms except UPI’s requested modifications.

UPI spokesman Dave Wickenden said: “We expect the application to be heard in about 14 days.” UPI management has said it is not trying to destroy the union but is merely seeking to impose cuts it thinks are necessary.