(Reuters) - The Boston Globe and its largest union reached a tentative agreement late on Tuesday on pay and benefit cuts following a months-long dispute that threatened to shut down the 137-year-old daily U.S. newspaper.
Boston Newspaper Guild and Globe officials said the tentative agreement includes a 5.94 percent salary reduction and modifications to contract language on job security among other concessions.
The Guild said it has negotiated steps to help limit the financial hardship imposed on members from the temporary implementation of a 23 percent pay cut that the Times imposed as a way to get $10 million in savings from the union.
A vote has been set for Guild members on July 20.
"Our aim throughout our negotiations has been to achieve the necessary savings in a way that causes the least hardship for our employees," Boston Globe publisher Steve Ainsley said in a statement.
The two sides were in negotiations to agree on concessions that the Globe's owner, The New York Times Co, said were crucial for the survival of the money-losing newspaper.
The Times imposed a 23 percent wage cut on union members after they voted against an 8.4 percent pay cut, furloughs and a scaled-back retirement package. The union had said the 23 percent cut is illegal and threatened to challenge it before the U.S. government's National Labor Relations Board.
If union members agree to the cuts, it could resolve one of the biggest obstacles to the Times's plan to sell the paper, which it bought for $1.1 billion in 1993.
The company has hired investment bank Goldman Sachs to seek interested bidders for the paper. Three potential bidders have expressed interest privately, but none has yet begun discussions with the Times.
Reporting by Ajay Kamalakaran in Bangalore and Robert MacMillan in New York; Editing by David Holmes