2002 Year in Review -- Silver Lining Still Tarnished
By Erik Cagle
Say what you want about 2002, but very shortly you'll be able to say these two magic words: it's over.
By nature, printers are optimists. So are trade magazine journalists. Thus, coming off a dreadful 2001, horribly punctuated by a reeling economy and the September 11 attacks, most industry people were forecasting a much-improved 2002. No one was ready to pop the champagne cork, but a marked improvement was in the offering, with a strong economic rebound catapulting revenues heading into 2003.
Better days, like Godot, never arrived.
To say 2003 cannot be any worse than 2002 is tantamount to whistling in the dark. The last nine quarters have been brutal, to put it nicely. To echo the oft-repeated phrase of the last two-plus years: it has been this bad for this long.
Unfortunately, when 2002 is viewed 20 years down the line, it will be remembered for more than red ink. What follows is a few of the more memorable events that shaped the commercial printing industry.
Late in 2001 came the news that Ted Ammon, non-executive chairman of Moore Corp. of Toronto, had been bludgeoned to death in his home. An investment banker, Ammon was worth an estimated $100 million at the time of his death. Although the case generated national attention and sparked scandalous rumors, no one has been charged with his death.
Printing Arts America (PAA), Darien, CT, one of a once-large number of industry consolidators, filed for Chapter 11 reorganizational bankruptcy late in 2001. By the middle of 2002, each of the individual companies in the PAA chain had been closed or sold back to the original owners. Consolidated Graphics of Houston went back to work, landing former PAA business S&S Graphics, of Laurel, MD, in an acquisition. Another Houston-based consolidator, Nationwide Graphics, landed three PAA companies: Classic Printing, Nashville, TN; AIM Riverside Press, Pompano Beach, FL; and Printing Arts Houston.
Speaking of buying back businesses, the employees of Appleton Papers, Appleton, WI, plunked down $810 million to wrest ownership from parent company Arjo Wiggins Appleton.
Nezar "Mike" Maad, owner of the former Frontier Printing Services in Anchorage, AK, was sentenced to six months in federal prison after being found guilty of two counts of falsifying loan applications, one count of wire fraud and two counts of making false statements to the government. The Syrian-born Maad reported that his print shop had been vandalized—presses and related equipment were destroyed, with the words, "We hate Arabs" spray painted on the shop's wall. During the FBI investigation, it was learned Maad had falsified loan documents and lied to the government to obtain small business loans.
The acrimonious 14-month tug of war between Willamette Industries, Portland, OR, and Weyerhaeuser, Federal Way, WA, ended civilly when the paper giants agreed to merge. Weyerhaeuser paid $6.1 billion in cash and assumed $1.7 billion of Willamette debt.
Moore Corp. broke into the transaction column by swallowing up The Nielsen Co., a $90 million printer with facilities in Cincinnati, Florence, KY, and Durham, NC. But Danner Press, Canton, OH, closed its doors on 350 employees after more than 50 years of service.
M&A guru Chris Colville returned to Houston-based Consolidated Graphics, which celebrated by acquiring American Lithographers and Carqueville Graphics.
The Graphic Arts Technical Foundation (GATF) was the recipient of a four-unit Rotoman shaftless heatset web offset press from MAN Roland, boasting a bevy of added features supplied by numerous auxiliary manufacturers.
On the association beat, the announcement came that Gregg Van Wert was leaving his post as president and CEO of the National Association for Printing Leadership (NAPL) effective at the end of 2002. Joseph P. Truncale is slated to be named president on January 1, 2003.
Consolidation proved it was alive and well in the paper industry, with South African giant Sappi Ltd. shelling out $480 million for the rights to Potlach Corp.'s coated fine paper business.
With 401(k) horror stories grabbing headlines on the national front, President Bush turned to The Printer, of Des Moines, IA, as a stop on his retirement security reform tour. Bush cited The Printer as an ideal model for small businesses that offer 401(k) plans.
In an environment where many large companies were announcing the closing of numerous facilities, it was refreshing to see a new printer born. North Eastern Graphics, with the help of a state grant and equipment from a bankrupt printer, opened its doors in Waymart, PA.
Noted printing exec Chris Carpenter struck out on his own when he acquired the print division of Royle Communications Group, Sun Prairie, WI, from Richard Royle.
Quebecor World, Montreal, announced it was opening a 196,000-square-foot retail web offset production facility in Riverside, CA, creating as many as 200 new jobs in the process.
After a lengthy search process, Michael Makin emerged from a pool of 350 applicants to be named CEO of the PIA/GATF. Makin had been serving as executive vice president and COO of PIA.
Tragedy struck twice in the span of three weeks for Pewaukee, WI-based Quad/Graphics, the largest privately-held commercial printer in the country. A July 12 fire, likely caused by the collapse of an automated racking system, claimed the life of a cleaning service employee and destroyed most of a 10-story warehouse in Lomira, WI.
On July 29, the industry received a massive jilt when it was learned that Harry V. Quadracci, commercial printing's ultimate self-made man, had drowned in Pine Lake, near his Chenequa, WI, home. More than 2,000 people jammed The Basilica of St. Josaphat in Milwaukee to pay tribute to Quadracci; fittingly, a place of worship that had received a $500,000 donation from Quadracci to be refurbished.
The leadership torch was passed at Banta Corp., Menasha, WI, with Stephanie A. Streeter succeeding Donald Belcher as president and CEO. Streeter joined the company in January 2001. Like Belcher, who is retiring, she had worked for office products specialist Avery Dennison.
Belcher joined three other industry veterans—Rob Krehbiel of C.J. Krehbiel & Sons, Cincinnati; Michael Simon of Publishers Press, Shepherdsville, KY; and Ray Scholler, Times Printing, Random Lake, WI—as 2002 inductees into the Printing Impressions/RIT Printing Industry Hall of Fame during Graph Expo in Chicago.
In a bit of a surprise that left industry insiders whispering, Marc Reisch left his job as president and CEO of Quebecor World North America. The company acted swiftly, appointing division presidents John Paloian and David Boles as co-chief operating officers, reporting directly to Charles Cavell.
The R&E Council of the Graphic Arts Industry and the NAPL, in an effort to boost memberships for both associations, announced they would be merging. The former is now known as the R&E Council of the NAPL.
Bowne & Co., New York, enduring the tightness of the financial market, announced an initiative that calls for $10 million in annualized cost reductions. As part of the initiative, the company was letting go five percent of its work force in the Print Division.
Here's hoping that 2003 has a lot more to offer than its predecessor. Stay tuned.
