Customer Demand for Unionized Printing Companies Still Remains Strong
The face of unionization in the United States, and within the printing industry itself, has changed drastically in the last 10 years. Consolidation has taken out many union shops, a trend that is unlikely to change. Membership ranks continue to dwindle, and organizational efforts seem to have become a thing of the past.
Curiously, however, an argument could be made that as the union population diminishes in the printing industry, the stronger the need for printing the union bug becomes—creating a niche of work that not many shops can lay claim. As the list of union printers condenses, the greater the opportunity that exists for the remaining establishments.
Earlier this year, a pair of longstanding union shops in the Los Angeles area joined forces, with The Harman Press purchasing Fox Printing. These were two venerable, family-owned shops: legend has it, The Harman Press (affiliated with Teamsters Local 572) was won in a poker game from founder Joe Goldner back in the 1940s. Harman serves the entertainment, health care and political realms and has some crossover with Fox, which also provided work to the entertainment trades, building trades, Teamsters and other unions.
While Fox Printing owner Gary Fox feels the combination makes for a good fit, selling the family business was nonetheless a bittersweet move to make. Fox had reached the conclusion that selling was necessary roughly 15-18 months before the deal with Harman was consummated. Despite having a legacy (sons Todd and Brett, and stepson David Wardlaw), Gary Fox felt the business was not sustainable on its own.
"What happened with the economy during the last six, seven years hurt everybody, and printing seemed to be fading away," says Fox, who notes that about 95 percent of the company's work was for union clientele. "We had a great book of printing that was loyal to Fox, some customers that go back to when my father was running the business.
"There's been a lot of changes in the last 10 years. The open (non-union) shop has closed the gap, but I think union printers still have a better offering for the employee. And no matter which political party you talk to, politicians have put the kibosh on unions; it seems they're not carrying the union torch like they used to. Maybe some old-school politicians still do, but I guess it's just a sign of the times."
The Contraction Factor
The shrinking union printer tracks the shrinking commercial printer in this country. RR Donnelley's 2013 acquisition of Consolidated Graphics and Quad/Graphics' megadeal that landed World Color in 2010 are prime examples of industry and union contraction.
Jim Kyger, assistant vice president of human resources for Printing Industries of America, says about 5 percent of printing industry employers have some or all production employees represented by a labor union. The Graphic Communications Conference of the International Brotherhood of Teamsters (GCC/IBT) is the primary union in the printing industry, with a reported active membership of 33,263. The Communications Workers of America (CWA) represents less than 1 percent of industry employees.
One of the greatest challenges facing union shops is their participation in multi-employer pension plans, according to Kyger. These plans are defined as critical by the Pension Protection Act of 2006, which means the plan is 65 percent funded or less. When a plan is underfunded, the participating employer has to footnote their company's withdraw liability on its balance sheet. Any firm that exits the plan must pay the withdraw liability.
Despite the challenges facing union shops, there are ample success stories. One of those belongs to Inland Press, a commercial shop based in downtown Detroit. Company President Brad Thompson says the ability to print the union bug has led to numerous opportunities, including a few niche markets. Two keys have helped sustain Inland's competitiveness: it exited the union pension plan about 10 years ago, and its wage scale is comparable to open (non-union) shops.
While not as powerful as it once was, the United Auto Workers is a staple of the Motor City. Inland Press benefits from jobs needed by the Democratic party, governmental units, health care and insurance clientele—all of whom seek the union label.
During the last 10 years, Thompson says his company has become more of a strategic partner with the unions. He consults with them on heavy iron purchasing decisions as it impacts staffing, and Thompson is pleased with the strong relationship that's been cultivated with the union.
"We've been unionized for about 100 years, so my perspective is a little different," Thompson notes. "The union hasn't really restricted me in what I can do. We've brought in new technology, and they have not been problematic to that. I think their leadership gets it, that the better we do, the better they're gonna do. Being an obstructionist is not a way for us to do well.
"Their enlightenment and real dedication to maintaining and saving jobs is important. Twenty-plus years ago, that was much less likely. They would take a philosophical position, come hell or high water, and if it cost jobs, then it cost jobs."
Inland is a bit different than most union shops. For one, it is a dba of the Detroit Legal News, publishing legal newspapers and performing legal notice work. That provides a base of work for the printer. Plus, Inland is publicly held, which has financial reporting and capex ramifications.
Thompson adds that Inland is debt-free. "Banks are not a printer's friend these days."
Another longstanding union printer still enjoying success through adverse economic conditions is Burton & Mayer, of Menomonee Falls, WI. It is a national provider to more than 1,000 customers, from retailers to publishers (catalogs, magazines, books and directories) and health care.
Tim Burton, company president, notes that his company has an advantage when it comes to bidding on work for political and advertising clients who require the union bug. Ballot printing has been a growth area and, like Inland Press, Burton & Mayer's wages are very comparable to open shops.
"The union has negotiated that area reasonably with us," Burton notes. "With the health insurance and pensions, we're probably paying more than non-union shops. And the pensions, that whole situation with being under-funded...it's an issue we have to deal with."
As technological advances have brought about considerable changes in the production process, Burton points out that the unions have been amenable. The same goes for championing moves into ancillary products and services. Burton & Mayer sells premiums to its print customers and has moved into the retail environment with kit packing and shipping materials to stores.
Digital printing has helped fueled growth during the past 10 years, and wide-format work has taken off since it was added a few years ago at Burton & Mayer.
"Not that we command a premium for it, but we certainly are favored because we are a union printer," he says. PI