PI 400 - - Year in Review - A Year We'll All Remember
BY ERIK CAGLE
Without a doubt, 2001 was both a forgettable year and a year that won't soon be forgotten.
Printers spent most of the year lamenting a poor economy that seemed to be trying to outdo itself in finding new lows with each passing month. Their customers, print buyers, were feeling the pinch: ad pages and folios dwindled, print orders declined and traditional commercial work seemed to be taking a beating.
Others blamed the Internet and Web-based technologies for muscling in on the already-thinning turf, but the poster child of 1999 and 2000 was crying in its own beer. Industry dotcoms found venture capitalists weren't venturing into their neck of the woods, so they needed to find more traditional, well-heeled bedfellows to stay afloat. Some did, others didn't. Struggling companies such as 58k, Creative Pro e-Services, PrintNation, Printbid and Collabria were all acquired by contemporaries for their technologies.
The poor economy had an immediate impact on mergers and acquisitions, which dwindled down to a handful of notable transactions. The few that did take place trace their roots back to the now-seemingly heady days of 2000.
In early September, thousands of printers converged upon Chicago for PRINT 01 with a sense of hopeful optimism. After all, economies stumble and rebound, and new technologies often afford even newer opportunities for this venerable, enduring industry. Talk revolved around a possible shift in the fourth quarter of the year, leading to a more fruitful 2002. And what better way to usher in this infusion of confidence than to visit the Windy City and witness the industry at its best?
Hopes for a promising end to a largely dismal year, and more than 5,000 souls, were lost in less than an hour's time on the morning of September 11, 2001. Osama bin Laden, airplane security and Anthrax worked its way into our everyday vocabulary. Our nation moved quickly into a wartime posture, and it will be a long, long time before life in America resumes any semblance of normalcy.
On the other hand, our nation banded together to pick up the pieces of shattered buildings, lives and careers. People gave at the office and at home: money, blood, foodstuffs. A national telethon raked in millions and, as of mid-October, the total tally of funds raised to support the efforts to aid those affected by the events of September 11 surpassed $1 billion.
And while the economy continued to reel in the aftermath of September 11, with major print players announcing massive layoffs and plant closings, an underlying feeling in many of us underscored the notion that this country didn't get where it is today simply on its looks. Without a doubt, 2001 was both a forgettable year and a year that won't soon be forgotten—but the test of time will yield a nation stronger than ever before.
The highlights of 2001, from the commercial printing perspective:
In December of 2000, Weyerhaeuser began its year-long courtship of fellow paper giant Willamette, that eventually evolved into an attempted shotgun wedding. A hostile bid attempt was launched by Weyerhaeuser and, by the middle of the year, its greatest success was in landing three representatives on Willamette's board of directors. As 2001 drew to a close, there were indications that Willamette was easing the grip on its "not if you were the last paper company on earth" mentality toward Weyerhaeuser. The magic number may be $57 per share.
Mead and Westvaco beat Weyerhaeuser and Willamette to the M&A punch, however, with their August 29 merger. The company will now be called MeadWestvaco.
Master Graphics, formerly of Memphis, TN, entered Chapter 11 reorganizational bankruptcy, then emerged shortly thereafter with a new game plan. The company now also dons a new name, Premier Print Holdings, and a new headquarters in Charlotte, NC.
Expansion plans came from Quad/Graphics, Pewaukee, WI, which announced a new facility to go live in the spring of 2002, while Edge Graphics, of Milford, OH, opened a new facility and added equipment. Moore Corp., of Toronto, on the other hand, announced it was cutting $100 million in a cost-savings initiative. The 12- to 18-month plan results in a 10 percent loss of the company's work force.
St. Ives plc, of London, made M&A headlines this year with the acquisition of Avanti Press and its subsidiary, Case-Hoyt. Trend Offset Printing, of Los Alamitos, CA, worked its way into Florida with a new facility in Jacksonville, while Courier Corp., of North Chelmsford, MA, virtually doubled its printing pleasure by investing $15 million worth of equipment to bolster a $16 million initiative from 2000.
Renewal plans were abundant in 2001—and they were costly. Standard Register, Dayton, OH, sliced away nearly 30 percent of its work force, or roughly 2,400 employees.
Quebecor World, of Montreal, combined its commercial and direct mail groups, creating a business unit with sales in excess of $1 billion. However, the world's largest printer announced that facilities in three states would be closed, totaling more than 1,000 layoffs. Before the end of the year, Quebecor World revealed it would reduce its work force by another 6 percent, or approximately 2,000 to 2,500 positions.
R.R. Donnelley & Sons, Chicago, announced a "platform for the future" that included $300 million in investments in 2001 and 2002, but in the process of becoming leaner and stronger, plants in Houston, South Daytona, FL, and Des Moines, IA, were closed. About 360 jobs were lost combined, and another 250 general and administrative workers were cut loose.
Plant closings and layoffs hit full stride by the middle of the year as companies scrambled to issue new earnings forecasts. Cadmus Communications, of Richmond, VA, released 280 workers and Bowne & Co, New York City, released 650 people. Mail-Well, Englewood, CO, announced that nine plants would be shut down. And International Paper laid off more than 3,600 employees.
Hart Graphics passed away at the age of 89 in late February. The Austin, TX, printing operation closed its doors in April after failing in an attempt to procure a buyer. A total of 225 jobs were lost. Hart Graphics President Rich Barbee later hooked on with K/P Corp. of San Ramon, CA, as president and CEO.
Just two years after the Golden Books Family Entertainment printing facility had filed for bankruptcy protection and a year after its ribbon-cutting ceremony as the newly christened Artech Printing, 200 employees found themselves jobless as the Sturtevant, WI, company was ordered to cease operations by a federal bankruptcy judge after filing for involuntary bankruptcy.
Quebecor World broke back into the acquisition column by landing Retail Printing, of Taunton, MA. Retail Printing, which also boasts a plant in Nashville, TN, registered sales of nearly $100 million in 2000.
One Source Digital Solutions displayed plenty of moxie in rebounding from a prepress robbery at its plant in Phoenix. The robbers may have been carrying a wish list, but they weren't the sharpest knives in the drawer, as evidenced by their attempt to push an Indigo UltraStream 2000 out the door with an employee's pickup truck.
What will the year 2002 bring? Hopefully, a lot less of what 2001 had to offer. Stay tuned.