United Press International President William J. Small was fired yesterday and replaced with general manager Luis G. Nogales, the wire service announced.
UPI spokesman William Adler would give no reason for the firing of Small, a former news official with NBC and CBS, after two years as UPI president.
"UPI has been in a state of change," Adler said. "Small's termination should be seen within a context of positive change to straighten out UPI's finances and stabilize itself. The owners, management and staff have a lot of confidence that Nogales is someone who can turn the company around."
Nogales, 40, led the management team that developed an operating plan designed to make UPI profitable by 1985 after years of financially troubled operation.
"Small wasn't involved in our new operating plan," Nogales said.
William Morrissey, president of the Wire Service Guild, the union that represents UPI's editorial employes, said, "This is an important move. The UPI news report has always been the company's biggest asset, but its problems stem from its operations and finances.
"The union team which spent many weeks in talks with UPI thinks highly of Nogales, believes he can get operations and finances under firm control, and sees this as a positive development."
Small refused to comment on his termination.
"What makes you think I've been terminated?" Small said when reached by telephone in New York yesterday. Adler later acknowledged that Small had not been officially notified of his termination before UPI released the information.
Small, 57, joined UPI in September 1982 after serving as president of NBC News for nearly 2 1/2 years. Previously he had served as Washington bureau manager and senior vice president of CBS News and as a vice president of CBS Inc.
UPI faces tough belt-tightening. Last month the wire service announced plans to cut employes' salaries by 25 percent for three months beginning next Saturday. It also announced plans to suspend payments to its employe pension fund for a year and to give employes stock in UPI in return for concessions negotiatied between UPI and the Wire Service Guild.
The company said it would gradually restore the pay cuts and give employes a 5 percent raise over current pay levels in January 1986. During the nearly 13 months the pay cuts are in effect, reductions will average 13.8 percent. The union is giving up three raises its members were supposed to receive over the next 14 months as part of a contract negotiated last year.
The UPI plan also includes layoffs. UPI has laid off 47 of the 100 news staffers it plans to let go and it intends to lay off dozens of additional noneditorial employes.
The proposal must be ratified by the 950 members of the company's editorial staff covered by the Wire Service Guild. Members are voting now and the ballots will be tabulated Sept. 17.
Although UPI is in financial trouble, its owners, Douglas F. Ruhe and William E. Geissler, are negotiating for new ventures. Ruhe and Geissler reached preliminary agreement last week to join with Communications Satellite Corp. (Comsat) and Prudential Insurance Co. of America in satellite television broadcasting.
"This venture is the lowest cost and most efficient vehicle for transmitting information and we are looking ahead to what UPI must do in the future to diversify," Nogales said yesterday. "We have explained this venture thoroughly to our employes and their feedback has been positive."
The announcement of the venture, however, stunned many UPI employes who viewed it as a lack of commitment by the company to keep the wire service going.
Nogales said he will continue to carry out the new plan. "Our new operating plan has to do with editorial reorganization, an aggressive marketing plan, wage reductions, forced reductions and tight controls on expenses," he said.
Nogales was vice president of Fleishman-Hillard Inc., a public relations and consulting firm, for two years and executive vice president for seven years with Golden West Broadcasters before going to UPI in 1983 as executive vice president.