What would you do if someone threatened you? Strike back? Run away? Beg for mercy? Try to negotiate?
Last April, The New York Times in effect held a gun to the heads of Boston Globe employees – twice. The confrontation, say experts at the Harvard Program on Negotiation, offers valuable lessons in handling high-risk, high-stakes situations.
Background: Sixteen years earlier, The Times bought The Globe for $1.1 billion, the highest price ever paid for an American newspaper. The investment paid off at first, then the newspaper business started heading south. In 2008, The Globe lost $50 million; in 2009, it was on track to lose $85 million.
So The Times threatened to shut the paper down unless employee unions agreed to $20 million in pay cuts, lower severance pay, and an end to lifetime job guarantees for certain employees. Half the concessions – $10 million – were to come from The Globe’s largest labor union, the Boston Newspaper Guild.
Matters came to a head on May 3. The Times gave all the unions a day to meet its demands or face a shutdown in 60 days. Every union except the Guild agreed. The Guild held out, calling The Times’ tactics “bullying.” Then the two sides went into all-night bargaining. The Times had seemingly backed away from its ‘death threat.’ But not for long.
Four days later, The Times and the Guild had gotten nowhere. The Times still was demanding $10 million in concessions from Guild members – including 8.4% in pay cuts – and now it had returned to hardball tactics: Turn down the deal this time and the pay cut skyrockets to 23%, not 8.4%.
The Guild agreed to put The Times deal before the members without a recommendation for or against. Exactly one month later, the results were in: Guild members had voted no by a slim margin. Within an hour, The Times pulled the trigger: It imposed a 23% pay cut.
But that’s not the end of the story.
Amid threats and confusion, negotiations somehow continued. A few weeks later, both sides announced a revised deal. It still extracted $10 million in concessions from the Guild but sliced the pie differently. Now the pay cut was down to 5.94%. Guild members voted again. This time they bought it.
At the outset it looked crazy to stare down a loaded gun –at least one wielded by The New York Times. The Times owned The Globe. It had the power to make good on its threat.
Plus, both threats were made publicly, signaling The Times meant business.
But while hostile threats get attention, they also can inspire a backlash, Harvard analysts note. Many Bostonians felt bullied by The Times, which refused to open its books or publicly explain its take-no-prisoners threats. If the town was behind anyone, it was the Newspaper Guild.
In the end, each party got what it wanted – or enough, anyway, to save face. By creatively restructuring the package so Guild members’ paychecks wouldn’t be hit so hard, The Times got its $20 million in concessions and kept The Globe in publication. Guild members won on pay, kept their jobs, and got to brag they’d faced down the mighty New York Times and its loaded gun. And Bostonians still have their morning paper.
Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.
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