Here’s why.

When the Hearst Corporation declared they were “losing” money in the 2004-2006 round of negotiations with the Local 4 pressmen, they told us they were losing $1 million a week, and laid down demands for huge concessions worth millions to the company. When that did not work, the next week they began declaring they were losing $2 million a week. When that was not convincing, two weeks later they declared the paper was losing $3 million a week. When we called them on the ever changing loss numbers, the chief negotiator, the former chairman of the National Labor Relations Board, would not answer directly. "

"It recalls the answer Secretary of Treasury Paulson said when asked, (paraphrased) “Where did the number $700 billion come from for the bailout? Was it based on losses?” Paulson answered, “No. We just needed a big number.””

"The Hearst Corporation never declared in the last round of bargaining that it was unable to pay, for it would have had to show the union the real corporate books of the Chronicle. While the Chronicle showed “their books” to the union leaders, the books turned out to be un-audited non-corporate books which would not have been admissible in a court of law. Our local was informed that the Chronicle is owned by the privately held Hearst Corporation and the corporation is able to shift costs and profits wherever it wishes to make its different entities look however the corporate interest dictate."

"In 2005 – 2006, the former chairman of the National Labor Relations Board was hired to represent the Hearst Corporation at the negotiating table, and he just kept repeating that “they were losing” money and they wanted huge concessions from the pressmen. The former NLRB lawyer then had the balls to tell us that they were not losing money in the pressroom, and that even if Local 4 granted Hearst all the concessions it demanded, it would not change the situation. Nevertheless, Hearst insisted upon, and ultimately succeeded in forcing the local to grant historic concessions chiefly because of the unwillingness of our International to grant us strike sanction, and because of the eagerness of the International to reach an agreement over the heads of the local. This is another – very sordid - story and too long to tell here."

"Last October, I learned from people I know still working at the paper that Hearst intended to downsize the paper’s circulation to 250,000 and to target it to higher income communities especially in the East Bay and Peninsula, and to raise the price of the daily paper to one dollar for the daily and $2.50 for the Sunday paper. It is clear that Hearst Corporation is nearly there with daily production at around 300,000 and the price now $0.75 and $2.00, just four months before production is outsourced to the new plant in Fremont. At one point Chronicle publisher Vega, hired from the Detroit News after using thugs to defeat the strike there, announced that he could reduce circulation at the Chronicle and still produce a profit."

"It is true that today in 2009 there are far less classified ads in the paper, and fewer daily subscribers, and less readers than 15 years ago. This reality has been anticipated by the Hearst Corporation for more than 15 years, since probably 1991. Those of us who worked for the Chronicle and Examiner in the late 1980’s and the 1990’s knew the paper was re-structuring itself based on computerizing all pre-press functions and based on the increasing role of the Internet."

"All during the 1990’s the management at the Chronicle recognized that the younger generations were not reading the paper, and that there was a growing audience and market on the Internet. I was at meeting in early 2006, at the Marriot Hotel on Fourth Street I believe, when Dean Singleton of Media News, and owner now of all the papers in the Bay Area except the Chronicle, walked into the meeting and announced he had just made a deal with Yahoo. He told us that that was where he was putting his money for the long run. But Singleton also owns over 85 papers in the US and in recent years bought up every paper in the Bay Area except the Chronicle. It is naïve to underestimate the long term planning of the Hearst Corporation, or for that matter, other newspaper owners. "

"The publishers seem to enjoy declaring losses because it provides an opportunity to demand concessions. In each round of negotiations with their workers since 1990 the publishers demanded and often got from one group of workers or another major concessions, even when the paper was making plenty of money."

"Now, it appears to those still working at the plant that concessions will be demanded from the Guild and the Teamster Drivers and Mailers, which have already granted concessions repeatedly over the years since 1998. The pressmen have given all they can give."

"As for shutting down the paper, this is doubtful. Hearst paid $660 million for the Chronicle, paid $66 million to the Fang family to run the Examiner for 3 years, signed a one billion dollar contract with Transcontinental for 15 yeas of production services. It is unlikely that Hearst would have signed a 15 year contract for newspaper production services with Transcontinental, scheduled the outsourcing of production for June 29, 2009, and then four months before the deadline, announce that it was possibly shutting down. The most likely scenario is that this is prelude to much more drastic concessions. In order to lay the groundwork for success, the publisher had to issue a doomsday announcement. In the last round of negotiations, Hearst won all outside San Francisco delivery jurisdiction from the IBT representing the drivers, the jurisdiction from the Guild, the end of the pressmen’s contract at the current plants. The electricians and the machinists held onto to the work but instead of working directly for Hearst, they now work for contractors hired by Hearst."

"One note on the pressmen. Manpower Inc. is handling the hiring for non-union Transcontinental. Over 100 journeymen pressmen at the Chronicle applied for work at the new Chronicle printing plant. Not one has been hired. One very highly skilled and experienced pressman applied, and when he wasn’t called for an interview, he called Manpower. He reminded them of his experience, and Manpower responded, “We are not looking for experience.”

"What’s left is not pretty for the rank and file workers at the Chronicle. It is the same old story.The employers demand more for less. Hearst and corporate management will not have to worry about mortgages, rent, health care or pensions. When Hearst talks of “losing” money, it is opportunity talking."