NEW YORK, January 13, 2005 -- Metro International executives who made racially disparaging remarks that set off a media firestorm this week have resigned, according to Pelle Tornberg, company president and CEO. Steve Nylund resigned as president of Metro US, but will maintain his position as executive vice president of Metro International, "with no operational responsibility in the company." And Hans Holger-Albrecht has resigned from the Metro International board.

A company statement noted that "Recently, there have been stories in the news media that members of our organization have acted contrary" to the company's core values.

It also pronounced the actions "regrettable," and promised to take action on several other fronts. MediaChannel broke the story on Monday of the crude racist comments made by the executives, and of a pervasive corporate culture of discrimination.

Metro is hiring an outside firm to assess the policies and practices of Metro US with regard to employee and community relations as well as a new global director of human resources. It is also developing more training and sensitivity initiatives, and establishing citizen advisory boards in the communities in which it operates "to advise senior management on diversity issues." The company also says it will "redouble" its efforts to recruit a representative workforce of the racial and ethnic makeup of the communities in which it operates.

In a statement, Catherine Mathis, spokeswoman for The New York Times Company, said "As part of our continuing due diligence on the investment in Metro Boston, we are closely reviewing the steps that Metro International is taking to address recent reports of inappropriate comments by some of its staff and the process it pursues to ensure that it adheres to the highest standards of corporate behavior."

The Metro damage control came amidst growing speculation that The New York Times Company, which had proposed purchasing 49 percent of the Boston Metro daily for more than sixteen million dollars, would trying to modify its pending deal with Metro -- or perhaps to pull out of it entirely, as many in both the journalism and financial communities have already begun to suggest.

Threatened boycotts in Boston and New York, coupled with bad press all over the country, were tarnishing the cherished (and valuable) Times brand. And top executives, all the way up to publisher Arthur Sulzberger Jr., were said to be increasingly frustrated at the furor -- and at the amount of their time and attention the scandal has been demanding.

One Internet CEO who was meeting with the top Timesman earlier this week reported that Sulzberger's cell phone went off 'every two minutes' during their meeting. Each call appeared to concern the Metro story, and each successively made Sulzberger's face redder than the last as he attempted to dampen a story that began on the Internet but had begun spreading nationally like wildfire via outlets as varied as the Associated Press and Alternet.

Times management obviously is hopeful that the concessions by Metro will end the controversy and allow them to move ahead with their planned partnership.

GLOBE COLUMNIST KNEW

But the fact that a columnist for the Times-owned Boston Globe knew of the allegations of crude racism at Metro months before the story was reported here this week may further inflame the situation and cause more problems for the troubled venture.

Although the Globe's Alex Beam learned the basic facts behind the racism scandal now making front page news in Boston, he decided not to pursue the story. Beam was told by a former Metro executive of shocking racist remarks about African-Americans made by other Metro executives at company dinners in Rome and Stockholm in 2003. The executive, who attended both fests, was appalled by the remarks and said he wanted the truth about Metro's corporate culture of discrimination made public.

I know because he subsequently told me. I also know because I spoke with Beam in the course of my initial investigation. Beam confirmed over the telephone that he had been contacted by the former Metro executive, who had told him of fellow Metro executives telling 'jokes' about the anatomy of African-American men, and repeatedly referred to blacks as 'niggers.'

It is not known if Beam told anyone else at the Globe of what he learned about the Metro-racism, or why he decided not to put it in the paper months before the Metro-Times deal was hatched -- or if he did, why no one at the Globe ever mentioned the matter to Times officials as they were performing their due diligence while preparing to invest.

-- Rory O'Connor's blog, "Media Is a Plural," can be found at www.roryoconnor.org.

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