(FORTUNE Magazine) – The scene depicted in the drawing on this page refers to a wisecrack believed to have originated in embittered publishing circles. The scene is not reality- based. It is not really true that certain drivers who make around $100,000 per annum for delivering the New York Daily News to local newsstands have gone and hired liveried chauffeurs to do their jobs. Possibly the drivers sense that livery could be bad PR in the present period, when labor strife impends and the survival of the News is in question. But wait. A hundred thou for delivering the papers? Can it be? Yes, friends, investment-banker pay for newspaper drivers is definitely part of the scene at the News. (You could also look at it this way: Driver pay is increasingly the norm in investment banking.) The six figures get to be possible for certain drivers because their contracts give them endless shots at overtime even when other drivers are working only at drawing full houses. The News says it could deliver the papers with one-third fewer drivers (it now has almost 700). In some ways, the paper is just another victim of laws written to sustain union monopoly power. In other ways, it is a special case. The unions it deals with are unique. ''Now that Fleet Street has been cleaned up,'' Rupert Murdoch said in a speech last year, ''New York City newspaper unions can proudly claim first place as the most difficult and intractable in the world.'' Like other newspaper publishers in town, the News has endlessly tried to buy its way out of trouble. So now it has 250 workers with guaranteed lifetime employment contracts. Many of them do little or no work, as the printing technologies they were trained in have gradually gone to heaven. (The lifetime guarantee was part of a 1985 deal to allow some automation.) The paper also has numerous superfluous pressroom employees. The ''manning tables'' in its pressroom rigidly specify the employment of 14 workers per press. The job can typically be done by seven or eight. All of which explains why the News has lost money in seven of the past ten years. If the paper got rid of all the featherbedding built into its ten union contracts, it could publish with perhaps 2,000 employees instead of 3,100. Its labor costs, which now account for 48% of total costs (vs. perhaps 30% at comparable big-city papers) would decline by $50 million to $75 million a year; it should then be solidly profitable. ( In a world without union monopoly power, the News would simply fire the unneeded employees. In the real world things are more complicated. Firings would mean a strike, the strike would be violent, and the New York police might be unable -- or unwilling -- to protect those at work. The last time the paper tried to publish without union blessing was 1978. Some of its drivers ended up in the hospital, delivery trucks were firebombed, and the News gave up. For the time being, therefore, the paper is trying to get its way via negotiations -- which, however, have been going nowhere. At some point, the company can formally declare that bargaining has reached an ''impasse'' and impose its own pay and manning standards. But, of course, the unions would challenge any company contention that an impasse had been reached. They would ask the NLRB for an injunction against imposition of the new standards and might keep the News in the clutches of the courts for years. What can the paper do? A fair number of kibitzers seem to feel the answer is, once again, to pay the extortionists. That is, strike a deal with the unions to trim the head count in exchange for a ton of money. Mike Wallace, who did a 60 Minutes segment on the situation, left you thinking $75 million of severance pay -- some $75,000 per head -- was reasonable. Our own guess is that the paper will not pay the ransom this time. Either it will get the manning agreements it needs or its owners (the Chicago-based Tribune Co.) will fold it up. The prospect of a fold is the News's ultimate bargaining chip and only real hope of getting the labor skates to be reasonable -- assuming that anybody running a New York newspaper union would be capable of this metamorphosis.