Illinois Printers — Competition’s FierceJune 2008 By Erik Cagle
OK, stay focused. First, some things you may not know about Illinois. It’s more than da Bears, da Bulls and da Cubs (sorry Ozzie, no one cares about da White Sox). Not only was it Abe Lincoln’s and Ulysses S. Grant’s mailing address, it’s also where Barack Obama sleeps when not on the campaign trail.
Among the notables born in Illinois: authors Ray Bradbury, Edgar Rice Burroughs. John Dos Passos, James T. Farrell, Ernest Hemingway, James Jones and Irving Wallace, along with poet Carl Sandburg. Former President (and forever Gipper) Ronald Reagan, tennis star Jimmy Connors, musician Miles Davis, animation icon Walt Disney, actors Harrison Ford, Charlton Heston and Rock Hudson, and comedians Bill Murray and Richard Pryor cut their teeth here, as well. (Kudos to 50states.com for this info.)
The hog butcher capital of the United States, Chicago is the third largest city in the nation behind New York and Los Angeles. The Sears Tower was the tallest building in the world from 1973 until 1996; it remains the tallest in North America. The first McDonald’s sprouted up in Des Plaines. And, according to the state’s official Website, the name Illinois comes from a Native American word meaning “tribe of superior men.”
And don’t forget: The world’s biggest cookie and cracker factory is in Chicago. Nabisco cranks out billions of Oreo cookies each year.
But while you might not be able to walk five feet in Chicago without a cookie crunching under toe, this ain’t exactly the easiest state for printers trying to carve out a living there. It’s one of the biggest printing states, to be sure (more than 80,000 industry people cash a check because of it), but the economic conditions and competitive landscape don’t always foster success.
“There’s a definitive work ethic here that is pretty conducive to the printing industry,” notes Adam LeFebvre, president of Specialty Printing in Des Plaines. “But the [skilled] labor force is hard to find, especially in the press operator arena. It’s probably one of the biggest challenges in the industry today beyond the pricing issue. As people leave the industry and older workers retire, we’re competing with a lot of other industries over pay scale.”
The cost of doing business is a constant headache for printers nationally, and Illinois printers are feeling the pinch as much as anyone. Ken Field, president and CEO of Itasca-based Continental Web Press, points out that increases for consumables, energy and healthcare coverage—to name just a few—are difficult to reconcile with cost-conscious customers.
“It’s virtually impossible to increase prices,” Field remarks. As a result, we have to come up with ways to be more efficient within the manufacturing process.” To that end, Continental Web Press spent $24 million on new technology over an 18-month span in an effort to improve its production efficiencies.
When RR Donnelley is the anchor of printing for your state, it helps to have an easily recognizable point of differentiation, particularly in an area where there is equipment capacity saturation. M&A transaction activity—the roundup of companies like Banta and Perry Judd’s by Donnelley—took away two of Wisconsin’s leading printers and some believe Illinois’ fragmented market could also see more assimilation.
“Illinois, like most print markets, suffers from overcapacity in the traditional products,” states Ed Garvey, president and CEO of Niles-based The Garvey Group. “We have decided to build a unique product offering in Illinois by focusing on large-format printing. There will be more consolidation of printing companies here, but it is a very slow process.”
Ralph Johnson, president of Lake County Press in Waukegan, sees overcapacity and declining volume of work, along with pressures brought about by global expansion, as continuing for the foreseeable future.
“Our industry will continue to contract in terms of both the number of firms and total employment,” Johnson remarks. “This process is a natural progression in a maturing industry such as ours, and those firms left standing will be akin to Mother Nature’s survival of the fittest. As in any industry, only the strong and successful (i.e., profitable) printers will remain viable.
“These will prove to be companies that can continue to enhance their overall value proposition and prove to be innovative and flexible in their approaches to the marketplace.”
There are some, like Solar Communications President and CEO Frank Hudetz, who see the challenge to survive as more of a universal task and less geographically unique. It also helps, he says, to develop a business-based identity and stick with it.
“In the current state of the printing industry, the two basic business models that seem to best address this issue is to make the conscious decision to either view your company products and services as commodities and go for high volume and low margins with a lean operation, or view them as specialized services, which usually dictates high margins but low volume,” he says. “The key is to just make up your mind what your best strategy for survival should be.”
If you wish to do business in Illinois, it’s wise to make up your mind quickly in order to survive. PI
Standing Out from the Crowd
OK, so you do business in a state that has more than its share of business drawbacks and a heavy concentration of high-quality printers based there. How do you make a buck in this environment? Our panel of printers share the secrets behind their advantages.
Ken Field, Continental Web Press: We are truly a high-quality printer, as our customers would attest. We spend a great deal of resources on hiring top-flight employees. We don’t have a problem with keeping them on board; our average employee has been with us for more than 20 years. It’s a testament to a privately held company that is truly sensitive to its work force.
Ralph Johnson, Lake County Press: Our capital investments over the past seven years have helped us expand our levels of service, as well as our overall production capabilities. Two examples are our entrance into printing with full UV inks and coatings, as well as high-end digital color production printing. We’ve also experienced a wonderful trend of workers encouraging their sons and daughters to come to work for our company. It’s truly a joy for me to witness a 30-year employee running our 12-color, long perfecting press with his son at the feeder changing rolls for his father.
Ed Garvey, The Garvey Group: We decided to use the geographic advantage that Illinois has to offer to market our large-format offerings nationwide. We believe that our combination of products and location allows us to offer a unique solution for our target markets.
Adam LeFebvre, Specialty Printing: We’re working very hard to be a better printer through continuous improvement and by moving into new market spaces. We’re trying to mimic some of the services of the bigger printers with some of the personal touches of a small printer.
Andrea Plachy, Jet: Jet developed a well thought-out strategy to find markets that fit into its existing capabilities to increase sales and build our customer base.
Frank Hudetz, Solar Communications: What differentiates Solar in a very competitive environment is our focus on serving direct marketers with printing, packaging and mailing services using sheetfed offset, web offset and flexographic presses. Additionally, we recently invested more than $10 million to upgrade equipment and add new finishing capabilities that allow us to produce patented direct mail formats, which are personalized front and back.
Above, Frank Hudetz, president and CEO of Solar Communications, gets some camera time with his mother, Gwen, the wife of company founder John Hudetz. Below, Santa Claus is never too busy to pay a visit to his good little boys and girls on the second shift.