Quebecor World Looks for New Leader

MONTREAL—In a sharp and assertive tone, Brian Mulroney, chairman of Quebecor World, attempted to put down any industry rumors that the company's recent management troubles can be traced back to Pierre Karl Peladeau, chief executive of Quebecor Inc.

"I mention this because of facile commentary in some quarters about a 'P.K. discount', with the suggestion that there is constant interference that undermines operating management," Mulroney told shareholders at the company's annual meeting recently.

There have been rumblings among some shareholders that the recent wave of executive departures, as well as the announcement that the company would miss first quarter profit expectations, was the result of Peladeau's dabblings in the company.

Mulroney firmly denied the claim that Peladeau had a "personal need to micro-manage" North America's largest printing company. He did admit that while Peladeau often did not hesitate to express his opinions in a forceful, direct and sometimes colorful manner, his involvement has always been for the best interest of Quebecor World. "I have never seen an instance when his recommendations were not designed to improve this company."

The Peladeau family controls 63 percent of votes at Quebecor Inc. through multiple-voting shares. The parent company, in turn, has 76 percent of the voting rights for Quebecor World.

It has been a rough year for the company, which has had to deal with management turnover, dropping stock prices and a weak economy. Its problems started with a series of management changes. Long-time CEO Charles Cavell retired in April due, in large part, to poor health. He was replaced by Michel Desbiens who resigned as president and CEO after just a month at the helm of the printing giant. Desbiens left the company after learning that his wife was seriously ill. He told the company that in light of his wife's medical condition, he did not feel that he could continue on as CEO.

Quebecor World turned to Jean Neveu to replace Desbiens on an interim basis. Neveu has a long and successful history with the company, having served as president and CEO from 1989 until 1997 and as chairman of the board from 1989 until 2002.

The search for a permanent CEO is currently under way and Mulroney has not ruled out promoting from within the company.

Still, Quebecor World would find itself in the headlines yet again when the report came that co-COO John R. Paloian had left the company, as well. The reasons for Paloian's departure were not made public. However, David S. Boles had recently been appointed the sole COO of Quebecor World North America. Boles and Paloian had been named co-COOs in September of 2002 after the company made extensive changes to its operating structure. Boles has 20 years of experience in the printing industry. He has served as president of Quebecor World's North American Retail Insert and Sunday Magazine Group.

While it has been a tough year for the company, Mulroney believes that the tide is beginning to turn. Company executive say that they do not believe that the first quarter will be indicative of the rest of the year. Quebecor World has blamed its first quarter problems on rising fuel prices and continuing weak printing markets.