Editorial workers at United Press International yesterday voted to take a 35 percent pay cut for the next three months rather than test a management threat to close down the struggling news service.
Some 62 percent of those casting ballots over the past 10 days favored the cut, which UPI's owner, Infotechnology Inc. of New York, said it needed to help keep the wire service in operation while it searches for a buyer. Neither UPI nor the Wire Service Guild, the union representing about 320 UPI reporters, would release precise figures on the vote.
UPI's top executive, Pieter VanBennekom, said yesterday that 12 parties have expressed an interest in the news wire and one has made a preliminary offer. He declined to identify any of those involved.
"We have a better than 50-50 chance of selling UPI, as is, at this point," VanBennekom said. "It's difficult to see a scenario for any continuation of UPI beyond the next three months without a sale taking place."
The Wire Service Guild had recommended that its members vote against the pay cut, which will reduce the wages of top-scale reporters to $448.50 from $690 a week. Kevin Keane, president of the union, described management's proposal as "a take-it-or-leave-it offer" and said reporters who receive the highest guaranteed salary now will be paid only $10 a week more than a messenger at the Associated Press, UPI's chief rival.
But those who voted for the cut said they were in a no-win situation, given the increasingly tough job market. "I'm the sole supporter of three people, and my wife's going to give birth in February. I didn't have an alternative," said Pittsburgh sportswriter Chuck Moody, a 17-year UPI veteran and a union officer who voted to take the reduced salary.
UPI said the wage cuts will permit the 83-year-old news service to meet monthly expenses. It has been running a deficit of $2.5 million a month and has immediate liabilities of $10 million.
VanBennekom told employees at UPI's downtown Washington headquarters that the service wouldn't make any more layoffs during the next three months while Infotechnology's investment banker, Wertheim Schroeder & Co., considers buyout offers.
Infotechnology, which owns 97 percent of UPI and a 47 percent stake in the Financial News Network cable TV channel, said in October that it was unable to meet operating expenses or interest payments on its bank debt and was considering selling "some or all" of its businesses.
UPI's news reports from Washington were interrupted for several hours yesterday as a result of an industrial accident in Alexandria that severed some of its transmission wires. Before service was restored, UPI officials scrambled to reassure clients that the service had not been cut off due to its financial problems.