National Union of Journalists' representatives from across Johnston Press's main publishing centres have unanimously backed a motion of no confidence in the company's senior management and urged shareholders and communities to act to save their local papers.
Now the union is planning to stage a group-wide day of actions to highlight what it calls "the damage being done to local papers." It quotes the following examples:
"One title is restricted to just 12 photographs a week because of the lack of money to pay photographers, another cannot send a photographer to jobs after 5.30pm because of budget cuts. Another title has almost 25% of editorial posts currently unfilled and reps report that morale across the group is at rock bottom."
The cutbacks are affecting a range of papers, including The Scotsman, Edinburgh Evening News, Sheffield Star and Northampton Chronicle & Echo. The latest cuts were announced last week when Johnston announced the closure of the Glasgow East News and the Ayrshire Extra.
But Johnston's financial situation is parlous. Its ad revenue has declined. Profit forecasts have been downgraded. Its share price, trading at 58.50p as I write, has recovered only a little from its 30p low point. To put that in perspective, it was 393p a year ago.
The NUJ would undoubtedly point out that Johnston has enjoyed high profit margins, beyond 33%, in recent years. Why can the company not accept a lower margin without cutting back on staffing? However, by their nature investors - including our pension fund holders - are ruthless. They want the best returns available. So they are turning their backs on the maturing newspaper industry.
In order to prevent complete meltdown therefore, and thereby continue to attract some City support, Johnston must indulge in cost-cutting. Yet, as we all know, reducing staff often reduces quality. The result? Readers desert. Then advertisers, already difficult to attract, desert too. The downward spiral is inevitable.
Johnston has invested heavily in the future by devoting resources to online. But the revenue, although increasing, will never be anything like as lucrative as print ads, especially classifieds.
Johnston's problems are compounded by debt built up during its years of acquisitions. That strategy looked fine in the years when ads rolled in. As it grew the company achieved economies of scale that reduced overheads and provided healthy profits.
Now, of course, it looks flawed. All is not lost, but if Johnston is to survive it must find a way to pay down its debt while continuing the switch from print to screen.
The NUJ knows this, of course. Its members in Johnston's papers know this. But it's tough on those who face redundancy and on those who must work harder.
Johnston and the NUJ need to get together to find a compromise if there is to be any way of avoiding an industrial dispute that willl harm both sides in the long run.
