European Stars and Stripes (Newspaper) - April 22, 1994, Darmstadt, Hesse                                Page 4 the stars and stripes stripes in transition Friday april 22,1994 Exchange plan seen As hurting paper proposal puts staff risk general says by Chuck Vinch and Joseph Owen staff writers Washington the military Exchange services proposal for taking Over the stars and stripes bookstores could Hurt employees disrupt Patron service and add to the Germany based newspaper s formidable Money woes a . European come official says. The stars and stripes currently oper ates 105 bookstores on military installations in Europe and has been losing Mil Lions of dollars for More than two years. The army and air Force Exchange service and the Navy Exchange a Brand both have declined repeated requests to discuss details of their proposal for the Keller Bookstore Transfer which was ordered by Congress As part of the fiscal 1994 defense authorization act. Congress criticized stars and stripes management for being slow to react to the draw Down and acted to Transfer the bookstores after Exchange officials testified in hearings that they could continue tomake a profit while offering greater Price discounts to customers. But in a March 29 letter to american forces information service officials the Neucom s chief of staff . Army u Gen. Richard f. Keller said the Exchange services proposed Transfer of function agreement would have an Adverse Impact on a number of key issues apis the defense department Agency that sets operating policy Tor the european newspaper and its Pacific counterpart has been designated the Lead Agency for carry ing out the Transfer. Neucom which is As sisting stars and stripes officials in negotiations with the Exchange services function Sas the european paper s Parent Organiza Tion. -.-./. The proposed Tea Transfer of function agreement inadequately provides for european stars and stripes employees and seeks to place the financial Burden and risk of the Transfer on the newspaper Keller wrote in a letter to apis. A key Issue in the negotiations Between the newspapers and the Exchange services Isth timing of the payments that the exchanges will make for stars and stripes inventory of books and magazines said Jef Frey Dalbey director of resource management for army s no appropriated fund accounts. That inventory is reported to exceed $12 million. Dalbey said that if the Exchange services pay for the Stock within three to six months the stars and stripes bookstores like this one at Schinnen Netherlands Are scheduled to be taken Over by cafes by oct 1."" then the newspapers will have a War Chest to solve the immediate funding crisis. The Outlook for continued operation of the european edition Over the next few years depends on How the Transfer of function goes Down Dalbey said. Keller said there is also a concern about a possible drop in customer service and Quality of life standards under the Exchange services proposal. We need a process which requires coordination not just notification with installation commanders before hours Are changed services decreased and facilities annual leave As Well As full credit for Naf service for pay and retirement purposes. The organization currently employs about 552 people. More than half of those Are involved in non newspaper operations. Neucom s proposal also Calls for the exchanges to maintain a comparable Assort ment of books and magazines and consult with local commanders on proposed changes in operating hours As Well As clo sures and consolidations of any stores. Keller said the Exchange services pro posed financial requirements would hit the newspaper so Hara that its existence might spend Large amounts of taxpayer Money to keep the newspaper afloat when there May be cheaper ways to Supply news to overseas troops "   " the army is the successor in interest tothe stars and stripes which Means it is obliged to cover the papers operating losses with no appropriated morale Wel fare and recreation funds administered by the Community and family support Cen Cluj we need a process which require coordination not just notification with installation commanders before hour Are changed services the created and facilities Are changed consolidated moved or  55 v jews. Y. % ii 5en. Richard  a com chief of Taff Are changed consolidated moved or reduced Keller said. The proposed terms of the Transfer agreement offered by the stars and stripes and Neucom would require the exchanges to offer jobs to All . Dollar paid Nona Propri ated fund employees and local National employees in the Bookstore opera Tion. " ,. Vav  would maintain their current pay Levels and benefits including sick and be jeopardized. The bookstores have Long been the Finan Cial Backbone of the paper. Congress included language in the 1994 defense authorization act that indicates any losses created by the loss of Bookstore Revenue would be covered by appropriated funds tax dollars. However Congress did not pro vide Money for that purpose although i could do so As part of the fiscal 1995 budget. But some army officials Are unwilling to army officials estimate that without the Bookstore revenues the two stars and stripes newspapers would need $20 million to $25 million per year in appropriated fund support More than double the amount of taxpayer Money they say the newspapers now receive each year. The european paper s commander air Force col. Steven s. Hoffman declined to comment on those projections or on the Progress of negotiations with the Exchange services. He stressed the importance of distinguishing Between the european and Pacific newspapers however adding that they operate under different budgetary Circum stances. /. -. The bookstores in Europe Are due to be transferred no later than oct. 1. No Date has been set for the Transfer in Europe Al though the Pacific switch will begin May 1. Keller said in his memo that under the exchanges proposal the stars and stripes probably would have to shut Down by nov. 1 unless another significant source of outside income was found. The european come s goals Keller said Are to minimize the Impact of the Transfer on employees ensure no disruption of serv ice for customers and preserve the future of Pur service members  stripes financial future rests with cohere is ". ". By Chuck Vinch and Joseph Owen staff writers Washington it will literally take an act of con Gress to Rescue the financially ailing european edition of the stars and stripes. In the fiscal 1994 defense authorization act which is the Pentagon s annual budget Congress last year ordered the stars and stripes newspapers in Europe and the Pacific Region to turn Over their bookstores to the military Exchange services by oct. 1 this year. The loss of Bookstore Revenue coupled with multimillion Dollar business losses following the draw Down in Europe Means the european edition of the stars an stripes will run out of Money by nov. 1 and must find other sources of funding. Congress has said the newspaper which was mostly financed by Bookstore profits before the draw Down will now be funded by the defense budget but lawmakers have not yet prepared the fiscal 1995 budget Bill. Appropriated funding additional increases in Advertis ing revenues and further cutting of operating expenses Are necessary to ensure that the stars and stripes survives said Jeffrey Dalbey director of resource management for the army s no appropriated fund programs. Dalbey who has been monitoring the newspapers financial situation on behalf of the army Community and family support Center said it is difficult to predict whether the european edition will survive. It s going to be a close Call he said in the legislation that directed the bookstores Transfer lawmakers also told the Pentagon to study alternatives to the two overseas dailies. So the american forces information service prepared a draft study not released publicly that lists nine possible  some senior army officials Are criticizing the draft calling it narrow and a objective. Two army officials Are so dissatisfied with it that they have asked Edwin Dorn undersecretary of defense for personnel and readiness to step in army chief of staff Gen. Gordon r. Sullivan wrote a March 15 memo to Dorn asking assistance in determining the Best Way of providing news to our overseas  Sullivan basically wants a new study said an army official who spoke on the condition of anonymity. The army s comptroller it. Gen Merle Freitag criticized the study As a validation of the status  seven of the nine alternatives keep the stars and stripes in one form or another in existence Freitag wrote in a March 17 memo. Jordan Rizer director of afis which is the Pentagon office that oversees the stars and stripes declined to comment on the study because it is not final. Rizer also declined to discuss a decision paper that he said was being prepared for defense Secretary William Perry on How the european and Pacific editions of the newspaper will be configured and supported after the exchanges take Over the bookstores but Bill Monroe the newspapers ombudsman said he thinks any study will find no viable alternative to the two publications. Every alternative that can be suggested is either too see future on Page 5