Borders Group Inc. ended the year 2003 on a positive note,
despite suffering setbacks due to labor disputes in the Ann Arbor
store.e.

But Borders officials said they would not raise salaries for
their employees, despite an expected 12 percent increase in
earnings from the previous year.

Recently released unaudited results for the holiday season and
the full year 2003 show that retail sales and earnings per share
rose from the last year.

Jim Kirk, an employee at the Ann Arbor store, said he was
pleased with the profit results, as they would allow the company to
pay its employees more.

But Anne Roman, corporate spokesperson for Borders, said the
question of raising benefits and wages does not arise in Ann Arbor
since the agreement signed with the union covered all the demands
the union’s demands.

Borders has an ongoing commitment to awarding increases in pay,
she said. “Last year we awarded a 3 percent increase, and
again this year we are awarding a 3 percent increase,” she
said.

She added that Borders does assess market conditions around the
nation and adjusts wages accordingly.

Total sales for the company were $3.7 billion, up 6.1 percent
from same-store sales last year, and the holiday season seemed to
be more upbeat than expected, according to a company press
release.

Sales during the fourth quarter increased 7.5 percent from the
same period last year.

Added to this, Borders management revised earning estimates
upwards for 2004. Management expects a 12 to 15 percent rise in
earnings per share in 2004 as compared to 2003.

Hal Brannan, a long-time Borders employee at the Ann Arbor
store, said that the store in Ann Arbor did not earn as much as
other Borders and Walden Books stores around the country. Borders
owns Walden Books.

“Sales were down 50 percent. On some days they were down
as much as 75 percent,” said Brannan.

He added that he attributed this drop to picketing during the
holiday season.

For almost a year ending in January the Ann Arbor store
experienced disputes with union employees. The union ultimately
went on strike. Disagreements ranged from wage issues to job
security to communication about job satisfaction.

In early January, after numerous discussions and hours of
striking, the workers union and management agreed to a tentative
labor agreement.

The issues settled included wage increases, wage caps and the
institution of forums where temporary employees can voice their
concern on issues to management.

However, Brannan said he hopes that since things have been
resolved, the store will be able to show profits in line with its
other stores within the company in the coming year.

He said that the economy is improving and sales are beginning to
recover.

Brannan said he believes Borders will not likely raise wages or
increase benefits even though it has performed well financially
this past year. He said the company is outsourcing jobs overseas,
and that so long as there are ways for management to keep wages
low, there will be no incentive for them to increase wages or
benefits in the near future.

“They look at prevailing wages, and as long as there are
people who are willing to apply for the $6.50 cashier jobs, they
will not raise wages.” Brannan said.

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