United Press International yesterday reached an agreement with its employe union that reduces the chances of a strike while the news service reorganizes under Chapter 11 of the federal bankruptcy code.
UPI agreed to withdraw its petition to the bankruptcy court asking for permission to void the union contract, a federal mediator said at a hearing before Judge George F. Bason Jr.
The Wire Service Guild, representing about 750 domestic UPI employes, agreed to halt the strike vote it began Thursday, said the mediator, Ed McMahon of the Federal Mediation and Conciliation Service. Bason thanked both sides for withdrawing "from the precipice of a potentially disastrous conflict to work together for the benefit of all," and appointed McMahon to mediate further between the two.
McMahon announced the agreement after several hours of negotiations between the two sides, which disagree over the need for further labor concessions to save UPI. The company and the union plan to begin formal meetings Aug. 14, McMahon said, adding that no deadline has been set for resolving the dispute. The current contract expires in April 1986 and will remain in force during negotiations, he said.
UPI management argues that it must cut labor costs to continue making an operating profit and attract buyers. The company asked the court to reject the contract after the union refused to accept proposed concessions, which include delays in restoring previous wage cuts and reductions in pension fund contributions and severance entitlements.
The company said the concessions would save $1.5 million, assuring a 1985 profit of $2 million to $3.3 million. Without the concessions, the company may end the year with a loss, UPI management said.
The union charged that breaking the contract would scare away potential buyers and vowed to "vigorously" challenge the company in court. The union executive committee had asked its members to authorize a strike in the event that Judge Bason terminated the union contract and it began mailing ballots on Thursday.