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Now Jeff Bezos gets to experience the joy of dealing with unions

Now Jeff Bezos gets to experience the joy of dealing with unions

“None of [Amazon.com’s] 90,000 workers are unionized”

WaPo, apparently trying to send a message of future independence, has an article today about lobbying by Amazon.com, founded and run by new-WaPo owner Jeff Bezos.

Deep down in the article is an interesting point about Amazon.com and unions (emphasis mine):

– Amazon’s fight with unions. The New York Times recently reported that Amazon has been clashing with labor unions in Germany over wages. “The subtext,” the paper reported, “is Amazon’s opposition to unions in its warehouses as a general principle, because the company fears unions will slow down the kind of behind-the-scenes innovation that has propelled its growth.”

That’s not the Times’s editorializing. That was the explicit view of Dave Clark, Amazon’s vice president of worldwide operations and customer services, who explained to the newspaper that “Amazon views unions as intermediaries that will want to have a say on everything from employee scheduling to changes in processes for handling and packaging orders. Amazon prizes its ability to quickly introduce changes like these into its warehouses to improve the experience of its customers.”

So far, Amazon hasn’t clashed directly with unions in the United States. None of its 90,000 workers are unionized. But the company has come under heavy scrutiny in recent years for its labor practices at its warehouses. A widely read report in the The Morning Call two years ago documented poor conditions at its Pennsylvania facilities, including heat-stressed workers. (The company says it has since installed air conditioning.)

What’s interesting about it is not only what it says about Amazon’s success, but WaPo’s failure as a unionized operation. 

The unions are expecting no short-term change under Bezos, but are noting an upcoming contract battle, via Jim Romenesko (underlining added, bold italics in original):

Here’s what Washington Post Guild unit co-chair Freddy Kunkle wrote on the union’s closed Facebook page:

Friends,

Many of you are wondering what the sale of the Post will mean for the union. Although there are still many questions that will need to be cleared up, it appears that the sale will not affect the Post’s relationship with the Guild.

Filings with the SEC say the new owner – Nash Holdings, LLC, which is presumably Jeff Bezo’s Delaware partnership — has agreed to honor all existing collective bargaining agreements and pension liabilities. The new owner also agreed to maintain all base salaries for at least one year.

Katharine Weymouth, in her FAQ’s, also says that she and the new owner “look forward to working with” the Post’s unions.

Put that all together with assurances from Don Graham and Katharine that there will be no immediate change in management, staff or operations, and it appears as if there is likely to be no change in the Post’s relationship with the Guild.

The only wild card here is that our two-year contract expired on July 26, and the Post, as allowed by the contract, has given notice that the contract’s provisions will be terminated on Aug. 9. So there is no collective bargaining agreement for the new owners to honor. Yet many of the terms also remain in effect as we continue negotiating toward a new two-year contract.

So right now, we intend to stay the course by working toward a new labor agreement and hope, based on all of the above, that the new owners are just as eager to reach a new and fair contract with us.

Best,
Freddy

Very, very interesting. 

It made no sense why someone like Bezos, who build Amazon.com by avoiding unions so as to allow quick business innovations, would buy a stodgy, moribund unionized organization like WaPo.  For $250 million he could have built a news organization from scratch.

Maybe the lack of an existing collective bargaining agreement at WaPo was part of the calculation.  If so, Bezos should expect a fight, as this article from late June reflects, Washington Post Guild: ‘The Post would like to fire you’:

The Washington-Baltimore Newspaper Guild says a Washington Post proposal for a new agreement with the union “would give managers the power to fire anyone for any reason” and also inserts a “poison pill that would make it even harder for the union to collect dues at the end of the next contract.”

Its proposal says management “reserves the right to terminate an employee for attendance and performance problems” without a written warning and a suspension as is currently required, “in appropriate cases.”

Another proposal, the bulletin says, would “eliminate important layoff provisions.” …

BULLETIN: The Post would like to fire you — and get rid of the union too
Colleagues,
How would you like to work in a place where you could be fired for no reason and without warning? Or be let go with two weeks’ notice or two weeks’ pay as a show of thanks for years of service? And where there would be no union to help you?
If the Post has its way, that’s where you’ll soon be….

You need to join the Guild. You need to sign up your friends and prepare for action. You need to join us in fighting for a moral workplace.

Good luck, Jeff, you’ll need it.

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Comments

I think Bezos paid what he did to buy a brand name he could not have captured for a long time with a news organization built from scratch. We will learn only over time whether the baggage that came with the brand will undercut the value he hoped for.

    There is a reason why WaPo was sold and it wasn’t because the building needed a new coat of paint or the air conditioner filters were clogged.

    Jeff may bust the union and if he does it’s going to be fun to watch.

      Uncle Samuel in reply to VotingFemale. | August 6, 2013 at 11:39 am

      I’d rather see him bust the unions than vice versa.

      Rick the Curmudgeon in reply to VotingFemale. | August 6, 2013 at 2:17 pm

      Bezos can afford to give the unions at WaPo whatever they want until after the 2016 elections, then shut it down. All they have to do is continue as before, being the house organ of the DNC.
      After that, he gets to claim his losses as a tax writeoff.

    serfer1962 in reply to Pettifogger. | August 6, 2013 at 5:33 pm

    Usually the transaction includes all employees fired after 30 days. This allows the new owner to continue business then keeping just the people he wants.
    I’d bet the union goes

The facilities, branding, good will, licensing and advertising agreements, and other are worth the purchase price. Key employees can be bought with individual contracts, and the rest if they don’t like it can be replaced.

Whatever happens, unions as currently constituted are dying. Evolution applies to all entities. Changing is the opposite of dying.

Now about the GOP, …

Perhaps Jeff can get pointers from Mayor Rahm Emanuel on how to deal with unions. The Chicago teachers are so compliant now.

If I could, I would buy the major newspapers, liquidate all of the holdings, destroy the presses, and sell the real estate.

And fire everyone.

Of course, the distribution circuits would themselves create new newspapers, and happened years ago when the NYC newspapers went on strike.

MaggotAtBroadAndWall | August 6, 2013 at 10:39 am

The union is in a terrible bargaining position. I read that revenues and subscribers have declined year, after year, after year. WaPo sold Newsweek to the Daily Beast for $1 about three years ago, and the Daily Beast has now sold the property to someone else. The New York Times lost $1 billion dollars on its sale of the Boston Globe.

What exactly does the union have to bargain with? The note from June is the equivalent of the union holding a gun to its own head and saying, “don’t move or I’ll shoot”.

    And, there are many newspaper people out of work, so replacing present employees would be fairly easy, if it becomes necessary.

    Pettifogger in reply to MaggotAtBroadAndWall. | August 6, 2013 at 5:22 pm

    What the unions have going for them is their history of shooting in exactly the circumstances you describe. “Sure,” they say, “we’ll go down, but we’ll take down your investment immediately. If you give us what we want, we’ll only take it down a bit at a time.”

    Helluva deal.

    Being in a union means being with the lowest common denominator. I’m worth more than that. I don’t want to be paid the same as all the rest. I want to be paid more, and I’ll do more to earn it. Let those that do the minimum be paid the minimum, but let us willing to do more, be paid more. Or less even. If I’m willing to do the job for less than what the unions have extorted from the company, let me have a job that pays less, or doesn’t have as many benefits, or has more flexibility. Let me negotiate my own pay/benefits/work rules.

Midwest Rhino | August 6, 2013 at 11:38 am

In Stallone’s timeless movie “Demolition Man”, Taco Bell had won the corporate wars, and owned everything. Maybe it will be Amazon instead, or Google. Profits have been elusive, but they sell everything now.

Bezos has money to play with … Amazon spends a few million a year on lobbyist connections, even had a visit from Obama. So as the left has shown us, beyond buying politicians directly, holding a news agency is another tool of leverage.

The deal doesn’t make sense to me, but if anyone can turn the clout of a dead tree, brick and mortar type business into an online success, it would be Bezos. Just ask Barnes and Noble or Borders.

He’ll need to hire some bloggers to round out the editorial content. 🙂

Bezos may be aware of the first rule of business: don’t voluntarily alienate a significant portion of your customer base. He may also be aware of the past, present and future reason for the decline of the dead-tree dailies: the interwebs. I hear Amazon has begun to explore these webs for retail purposes.

I doubt it is a coincidence that he acquired the business just as the union contract expired.

I know how Rupert Murdock got out from dealing with unions. He just took his newspapers away from Fleet Street.

What makes you think Bezos couldn’t do the same? Because the word “Washington” is in the header?

These papers have pension problems that far outweighs earnings, already. Maybe, Bezos bought this dreck for its value as a tax deduction?

Maybe, Bezos will sell a special kindle … that receives his news feeds? And, he dispenses with the printing presses? Or, he converts the printing presses into a museum? (Unlike art on the wall, you couldn’t exactly walk off with a printing press in your pocket).

By the way Bezos could also convert all that space into a warehouse.

When you’re rich you get lots of options. And, tax deductions, and business losses, means you keep more of what you earn.

You think there’s a downside?

I think he bought the WaPo with his lunch money.

KM from Detroit | August 6, 2013 at 12:53 pm

How would you like to work in a place where you could be fired for no reason and without warning?

Welcome to the real world…

Carol Herman | August 6, 2013 at 1:02 pm

As secret as this was; it was the WaPo that went about seeking suiters. And, there were TEN of them! So, there was a little bit of bargaining going on.

What sweetened Bezos’ offer is that it was “ALL CASH” … And, to show you what a force this guy is … he goes into the newsroom to make the announement … And, everyone in the room who heard it was forbidden to “tweet” for 10 minutes.

Of course, if this news is a bombshell, Drudge gave it center space. His photo of Bezos though looked like the guys arms got chopped off. Was Drudge commenting about what just happened? Drudge competes with lots of others to get to be the FIRST GUY OUT TELLING THE STORY. (And, Drudge’s site wasn’t for sale.)

Now it would be funny if Drudge was thinking of cashing out.

Carol Herman | August 6, 2013 at 1:04 pm

Oh, do you know who really feels bad? Drudge had been running the story that the New York Times at first couldn’t unload the Boston Globe. And, then? It sold for a billion less than Sultzberger paid for it a mere 3 years ago.

When you compare deals, one is better than the other.

NC Mountain Girl | August 6, 2013 at 1:37 pm

It seems the Graham family is smarter than the Sulzberger family. They diversified away from the core business while the Sulzbergers doubled down on newspapers.

toddlouisgreen | August 6, 2013 at 2:43 pm

“… a new agreement with the union would give managers the power to fire anyone for any reason…”

Madness! Supervisors and management shouldn’t be deciding who keeps their jobs and who gets fired. That’s just crazy talk. Only an employee should be able to decide if he gets fired. At least, as long as he’s paying union dues. I mean, if joining a union doesn’t protect you from getting fired when you’re a lousy ineffective problematic employee, what good is the union in the first place?

How would you like to work in a place where you could be fired for no reason and without warning?

WHAT?!?! You mean, be treated like that other 88% of the American workforce ? Oh, can you smell the oppression ?

The Washington Post Newspaper Guild announced that:

“Many of you are wondering what the sale of the Post will mean for the union. Although there are still many questions that will need to be cleared up, it appears that the sale will not affect the Post’s relationship with the Guild.

Bezos has agreed to honor all existing collective bargaining agreements, pension liabilities and at least temporarily hold salary levels where they are. The clunker here is that the Guild’s labor contract expired July 26 and the WaPo has already given notice that the contract provisions will be terminated on August 9.

So timing is everything.

Freddy Kunkle? Would this be “A Nightmare on 15th St. NW”?

Sharpshooter | August 7, 2013 at 6:16 am

Bezos’ first exposure to the union is probably going to be his tires being slashed.

He’ll buy new ones on Amazon.

Bezos is a very positive guy who looks on the possibilities of doing exciting things with his various businesses and hobbies. I believe he bought WaPo with that viewpoint. Think how eclectic his interests are both within the Amazon.com business itself and his outside hobbies. And he’s surprisingly good at them.

Rush Limbaugh remarked that Bezos is very antiunion in his business ventures. He’s in a big squabble in Germany over something with a German union in his operations. (I forget the details.) Honoring the existing WaPo union probably was a short-term concession, but is unlikely to stick over the long-term if Bezos seriously tries to do positive things with his new hobby/business.

Limbaugh also discussed Bezos’ politics and philosophy a bit. He’s been a big Obama supporter, he supports gay rights, and he also occasionally bills himself a Libertarian! Rush speculated that he really doesn’t have time to focus on politics in depth, given how busy is he running Amazon.com and his many hobbies. More gut level, instinctual rather than highly rational.

NOW, having said that, he clearly ran into “government red-tape” when Apple and a bunch of publishers challenged his e-book monopoly, his Kindle business, with their “cartel” of price-fixing iTunes-like alternative. He surely also knows that Amazon.com is now big enough in the marketplace that it has attracted the greedy, cynical eyes of the Political Class with their ability to blackmail you with antitrust lawsuits. Get big donations and things magically “fix” themselves. That’s what that whole trial lawyer, class-action lawsuit stuff is all about. Using the AT laws to line your own pockets. [Shakespeare, “First, we kill all of the lawyers…!]

I’m sure Bezos is a fast learner. I do suspect that his purchase of WaPo is buying silence from a still powerful voice in DC if and when Amazon.com runs afoul of the PC blackmailers in the future. Carlos Slim, the billionaire Mexican “bought” the NYT’s silence with his investment in that property. The NYT has not run a negative story on Slim since he made that investment. Ditto Warren Buffett and his (now former) investment in WaPo, too. Buffett bought silence over his self-dealing political and corporate interests, too. (His life insurance companies benefit from a high estate tax, since annuities are tax-deferred – a dodge from the estate tax. Similar things apply to other aspects of his business. No NYT or WaPo ever point out this obvious self-serving aspect of Buffett’s politics.)

I do think, though, the primary reason he bought WaPo is because he has some ideas up his sleeve for how to take advantage of its brand name in clever ways nobody has thought of so far. One other commenter pointed out that the “consumers” of high-quality political junky news are spread out over the entire country, but under the current business model for a WaPo, their advertising was stuck in the local DC market. You want the advertising market and the service user market to be pretty much the same thing! (Huh. Common sense.) Well, Amazon.com has the wherewithal to put those 2 groups together he pointed out.

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