The Toronto Star said late yesterday it will contract out its newspaper delivery business, a cost-cutting measure that has angered the publishing company's newspaper carriers.
The outsourcing at Canada's largest-circulation daily, which will also mean the loss of 200 mostly Star circulation department jobs, will reduce distribution costs by more than 50 per cent, saving publisher Torstar Corp. about $6-million a year.
Torstar will take a fourth-quarter restructuring charge of $26-million, the company said.
The Star has been in a dispute with its carriers over their desire to join the newspaper union.
In 1999, the Star's 2,000 home delivery carriers voted in favour of joining the Southern Ontario Newspaper Guild. Torstar challenged that, arguing the carriers are independent contractors and not eligible. The dispute was heard by the Ontario Labour Board and a ruling is expected in the next few weeks.
"It's union-busting on the highest order," said Howard Law, guild representative for Local 87-M. "We are looking at our options and we will be responding."
But the company countered that carriers are not affected by the restructuring.
"This decision has no impact on the carriers; the impact is on 200 Toronto Star staff," said Jagoda Pike, the Star's general manager.
The outsourcing of delivery operations is essential if the Star is to remain competitive, Ms. Pike said.
A distribution study by PricewaterhouseCoopers found the Toronto Star had higher-than-average distribution costs.