Pressures Facing Newspapers Seen in Detroit Strike : Labor: Growing competition from other media and soaring newsprint costs are factors in the bitter dispute.

A sign on the Detroit Pizza Factory, a hole-in-the-wall lunch spot downtown, shows where its loyalties lie as a strike against the city’s two newspapers enters its second week: “We Do Not Serve Scabs.”

The blunt statement of support is meant to warm the spirits of about 2,500 striking drivers, reporters, mailers and pressmen who took to the picket lines July 13 when talks on a new three-year contract failed.

The strike, the first involving the newspapers in 15 years, has taken on a bitter tone and divided a city long known for its proud union traditions. With no new talks scheduled, the labor combatants appear dug in for a long strike.

The dispute here comes as the newspaper industry nationwide faces growing pressure to increase profit margins as competition from television, cable and other media sources has intensified and newsprint costs have soared.

These pressures prompted the closing of the Houston Post earlier this year. Times Mirror Corp. last week shut its money-losing New York Newsday and is cutting hundreds of jobs at its flagship Los Angeles Times and other publications.

In Detroit, six unions went on strike after talks failed with Detroit Newspapers, the joint operating company that publishes the Detroit Free Press and the Detroit News.

Management has characterized the dispute as a battle over who will run the newspapers. As such, what management sees as its prerogatives have collided with the union’s desire to protect jobs and set workplace rules.

“We have got to get control of our business operations and work rules,” Robert Giles, publisher of the News, the afternoon newspaper owned by Gannett Co., said in a telephone interview.

Labor leaders say the newspapers’ contract offers amount to “takeaways” that will result in lost jobs and benefits. They say the papers want to cut 100 jobs, even though they earned $46 million last year and have pared several hundred positions since forming their joint operating agreement in 1989.

One key point of contention is the papers’ desire to reorganize their distribution system. This would result in the loss of nearly a third of the 189 district managers, who are members of the International Brotherhood of Teamsters.

The papers also want to convert 2,800 independent newspaper carriers to agents who would be paid a set fee for delivering the papers. The Teamster carriers now control subscription lists and pricing for home delivery.

“This is an attempt to bust the union,” Teamster member Clark Burns said Thursday as he picketed in a light rain in front of the Detroit News building on Lafayette Boulevard.

Newsroom employees, represented by the Newspaper Guild, are resisting a management proposal to classify reporters as professionals, meaning they would not be eligible for overtime pay. The papers also want to impose a merit pay system in place of the current system that provides yearly cost-of-living increases.

The newspapers are putting out a combined edition--heavy on wire service stories and lacking the normal complement of ads--using supervisory personnel and temporary replacements brought in from other papers owned by Gannett or Knight-Ridder, parent company of the Free Press.

They are publishing 550,000 daily copies, including 271,000 that are being delivered to customers’ homes. Combined, the papers typically publish 880,000 copies daily and 1.1 million on Sunday.

The unions dispute the company’s distribution claims. “Don’t believe their figures,” Al Derey, secretary-treasurer of Teamsters Local 372, told members at a union rally Monday night. “Stores are throwing them away.”

The unions are organizing a boycott of the papers. They claim up to 125 advertisers have withdrawn their ads--a number management disputes--and are calling for subscribers to cancel subscriptions.

Despite widespread union support in Detroit, some analysts say the labor organizations face a difficult task against the newspapers. They note that newspapers in nearly all markets are under pressure to reduce costs and that union clout has waned in recent years.

“In today’s day and age, going out on strike could be paramount to cutting your own throat,” said Kenneth Berents, a media stock analyst for Wheat First Butcher & Singer in Richmond, Va.

He noted that newsprint costs alone have doubled in the past several years and are heading higher. Staff cuts and productivity gains are the most efficient ways to make up such costs, he said.

The dispute, which has been marred by about 20 acts of vandalism and violence, has raised the possibility that the strike could result in the folding of one of the papers, particularly the Detroit News, which has been losing circulation since 1989.

Under the joint operating agreement, Gannett would still collect a share of the profits from the surviving paper. However, News Publisher Giles brushed aside that speculation, saying, “There is no possibility that that will be the case.”

But analysts cite the bitter 1992 strike in Pittsburgh, which involved similar issues to those in Detroit, that resulted in the closing of one of that city’s papers.

These lessons are not lost on some pickets. Detroit News police reporter Melinda Wilson, a five-year employee, worries she may not have a job to go back to. “I feel jobless,” she said. “I think maybe it’s time to rethink the whole newspaper business and my career.”