Detroit Strike: Two More Newspapers Go for Broke

CARRYING a placard outside the Detroit News building here, truck driver Jake J. says his union bosses would rather let two of America's largest, big-city dailies die than kowtow to the ''money grubbing'' owners.

''You've got two big companies trying to impose their conditions on the little guy because they want to make more money,'' says the card-carrying member of Teamsters Local 372.

Inside, Bob Giles, editor and publisher of the afternoon paper, responds. ''The issue is our need to be able to run our business in an efficient and competitive manner. If we don't, we're out of business anyway.''

Now entering its third week, Detroit's first newspaper strike in 15 years is the latest chapter in an increasingly familiar saga of self-preservation for American newspapers: how to streamline costs, modernize operations, and boost profits to stay alive amid growing threats from other news and information outlets.

Twenty-five hundred newspaper employees walked off the job July 13 - mostly in noneditorial positions, from drivers to mailers to printing-press operators. The six unions who represent them say they disagree with management on a wide range of issues, such as merit-pay increases, operating issues, and delivery-route sizes.

But Tim Kelleher, lead negotiator for the Detroit papers, says the issue is simply ''control.''

''We have to finally end the entrenched featherbedding enjoyed by union workers here, who work three hours of an eight-hour shift before they stop for the day because there is nothing left for them to do,'' Mr. Kelleher says.

Currently, federal mediators who have been trying to help the negotiations say the two parties are too far apart to even confer in the same room.

''Both sides are attempting to smear the other in the eyes of the public,'' says Rich Boehne, an E.W. Scripps Company executive whose company closed the Pittsburgh Press after an eight-month standoff in 1993 that involved similar issues. ''No one outside the negotiations can really know what is being placed on the table by both sides.''

Tempers on both sides are high, and threats of violence and physical abuse are rampant. A night guard was shot in the face with a pellet gun, and advertisers who continue to support the paper have been threatened with boycotts.

In the meantime, the Knight-Ridder-owned Detroit Free Press (morning) and the Gannett-owned Detroit News (afternoon) continue to publish and distribute with the help of employees flown in from other newspapers in their chains. Distribution to the two papers' nearly 900,000 subscribers has been cut drastically.

On the heels of four other newspaper closings - New York Newsday (July 16), the Providence Evening Bulletin (June 5), the Houston Post (April 18), and the Milwaukee Journal (April 2), readers and media analysts nationwide are watching the Detroit story closely to see if the two newspapers will buck the trend or extend it.

''The big-picture question here is that Gannett and Knight-Ridder are public corporations being pressured by the stock markets to keep their profit margins up,'' says Stephen Lacy, a professor of newspaper economics at Michigan State University in East Lansing. Mr. Lacy cites a recent study showing Gannett's yearly profits are 21 percent and Knight-Ridder's are in the teens - the worst showing for the companies in 30 years.

OTHER observers note that decreased circulation has exacerbated the Detroit problems. Though advertising revenues are up, they are not growing as fast as advertising revenue gains for other media. After years of shrinking subscriptions and newsstand purchases - as much as 40 percent in the past six years for the Detroit News - the two papers were also hit with a 50 percent increase in newsprint costs this year.

After employee salaries, the price of newsprint is the second-largest cash outlay for newspapers.

''There are four reasons for Detroit's newspaper strike,'' says Kenneth Berents, a media industry analyst with Wheat, First, Butcher and Singer in Richmond, Va. ''Newsprint, newsprint, newsprint, newsprint.''

Because of a worldwide paper demand that has driven costs up, Mr. Berents says even the nation's wealthiest papers are laying off employees. Times-Mirror Company, which owns the Los Angeles Times, recently announced that it would lay off 1,000 workers, including 700 from the Los Angeles paper.

Meanwhile, most analysts do not expect a quick ending to the Detroit strike. And they say that if one of the papers closes, trends show the Detroit News, the evening paper, is the one that would go. Evening papers across the country have born the brunt of newspaper shrinkage.