Talks to save the Boston Globe resumed last night in Boston after breaking down on Monday over a number of issues including the union's contentious demand to retain a lifetime jobs guarantee.
The Boston Globe Newspaper Guild, which is the paper's biggest union representing 600 staff, has agreed to cost savings that will amount to $10m.
This is in addition to another $10m that will be saved after the New York Times Co reached an agreement with the paper's six other smaller unions.
The New York Times Co had threatened to begin procedures to close the paper, which is on course to lose $85m in 2009, within sixty days if a deal could not be reached this week.
According to a report in the Boston Globe, details of the settlement will be released later today.
When talks resumed they were not hopeful and the New York Times Co put forward what it said was its "last, best offer".
This offer called for wages to be cut by 23% and for lifetime job guarantees to be abolished.
The Boston Globe Newspaper Guild feared that losing this right would lead to long serving older members of staff being made redundant.
On Sunday the Guild's offer, which included a 3.5% wage reduction for most members as well as pension cutbacks and a longer working week, was flatly and quickly rejected.
A letter was sent last night to members by Newspaper Guild president Daniel Totten. It said the New York Times Co has not only proposed a 23% wage cut, but also "intimated that a large layoff can be expected regardless of the outcome of negotiations".
Totten, in the letter, said: "The tactics and practices of the New York Times Co are unacceptable.
"But the Boston Guild entered [last night's] negotiations committed to negotiating an agreement that we can bring to our members for a vote."
The New York Times Co, which bought the Boston Globe for $1.1bn in 1993, threatened in early April to close the 137-year-old newspaper.
If it did close it would be the biggest casualty of the downturn so far in the United States.
More coverage on Brand Republic
Blog posts of the newspaper crises
- Fate of the Boston Globe hangs in the balance.
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- US newspaper crises accelerates as Senator bids to keep business afloat.
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- This is not a newspaper website (Seattle Post-Intelligencer goes digital).
- Would you buy a failing newspaper?
- Paid for content high on Guardian wish list.
- Time Inc considers charging subscription fees.
- How US newspapers are failing and the local future.
- Newsday -- beginning of the end for free content?
- Is it time for newspapers to start charging for content?
- Could the New York Times go under?
- The end of print for the Independent.