Corporate estimates it could incur a one-time cost of less than $60 million for severance, depreciation and pension expenses if it shuts down The Cincinnati Enquirer's printing plant next year, and moves production to The Columbus Dispatch, according to the just-filed quarterly report to federal regulators.
The company first raised that possibility in August, when it said it had signed a non-binding letter of intent for such a move with the privately-owned Columbus daily. As part of the move, the Enquirer would adopt a substantially smaller format: 10 ½ inches by 14 ½ inches. The shift could take place in the fourth quarter of next year.
Publisher Margaret Buchanan, who outlined the plan in a memo to employees, didn't say how many jobs were at stake, and she didn't disclose possible cost savings.
But in its 10-Q report to the U.S. Securities and Exchange Commission yesterday, Corporate included a cost estimate for the first time. The report doesn't disclose long-term savings under the plan.
"The final decision to implement this change to the company’s Cincinnati operations is dependent upon reaching a definitive agreement with the Columbus Dispatch," the report says.
It continues: "If this agreement is reached, the company will incur charges for the partial withdrawal from multi-employer pension plans which will be negotiated with the representatives of those pension plans. The company will also incur severance related costs for the reduction of its workforce in Cincinnati and it will begin recognizing accelerated depreciation charges on its printing facilities there. If a definitive agreement is reached, it is expected that a complete transition of operations could take approximately 12 months to complete."
Cincinnati and Columbus are about two hours apart, according to Google Maps.
Publisher Margaret Buchanan, who outlined the plan in a memo to employees, didn't say how many jobs were at stake, and she didn't disclose possible cost savings.
But in its 10-Q report to the U.S. Securities and Exchange Commission yesterday, Corporate included a cost estimate for the first time. The report doesn't disclose long-term savings under the plan.
"The final decision to implement this change to the company’s Cincinnati operations is dependent upon reaching a definitive agreement with the Columbus Dispatch," the report says.
It continues: "If this agreement is reached, the company will incur charges for the partial withdrawal from multi-employer pension plans which will be negotiated with the representatives of those pension plans. The company will also incur severance related costs for the reduction of its workforce in Cincinnati and it will begin recognizing accelerated depreciation charges on its printing facilities there. If a definitive agreement is reached, it is expected that a complete transition of operations could take approximately 12 months to complete."
Cincinnati and Columbus are about two hours apart, according to Google Maps.
Nice job of reporting, Jim. The Enquirer wants to keep this news from reaching the people of Cincinnati because of economic fallout from the loss of jobs and business activity. Closing the printing plant and outsourcing the work to the Columbus Dispatch is nothing short of a union-busting move, an unwise one at that. First off it costs them $60 million, then they're going to feel the pain and ignorance of trucking papers 100 miles through snow in the hope of getting papers to people's porches by 7 a.m. Gas prices alone makes that a dumb move. Deadline issues right there along with it.
ReplyDeleteWhy is saving money for stockholders Union Busting?
ReplyDeleteBecause the only real reason they are even talking about going down this road is to get BIG concessions from their production and circulation related unions. It's a bluff. They know it. The deadlines and the winter road hazards would jeapordize the entire franchise. They have no intention of following through with this. ZERO chance. But then again, they did ruin the franchise in Detroit to bust the unions. Maybe they will be that stupid twice.
ReplyDeleteGreat information Jim.
ReplyDeleteTo 9:37 PM, you might consider this simple point regarding ZERO chance: Buchanan shut a weekly printing plant in Cincinnati and sent the printing of those 26 papers to Lafayette, Indiana four years ago.
Granted, they’re not a daily but they’ve made a longer trek work with 220,000+ papers on roads that are arguably not as well maintained as 71 would be in the winter. Plus, Columbus isn’t that far away when one considers Cincy’s northern market area and its northern distribution center to serve it.
What? Gannett save money for stockholders? Since when? Pick your starting point. The lost billions of dollars in shareholder equity (and our 401k holdings) since 2004. The continuous, leech-like bleeding of newsrooms to artificially pump up GCI earnings. The criminal funneling of company money into the pockets of GCI executives and directors. Instead of union busting, we should have management busting. OCCUPY GANNETT!
ReplyDelete9:37 How stupid. Ruin the franchise? Detroit is listed as 23rd in the top 25 papers in the country.
ReplyDelete9:37 There are no "circulation related unions" at the Cincinnati Enquirer. Production did, at one time, have some union employees on staff. I am not certain how many at the facility are still union. Perhaps someone can share how many are union employees are still at the Western Ave. production facility.
ReplyDelete1139am,
ReplyDeleteHow stupid?? really?? You must not have been around when the Detroit papers were in the top TEN in the country with just their PAID circ only. yes, 23rd in the country when you include the 104,795 copies of paid digital "replica editions" (most of which is duplicated with print totals but also has only a fraction of the print advertisng value). Delivering to home delivery subscribers just a few days a week and on the other days putting out a thin single copy only version?? yeah....just like it used to be. right. I would also argue that the timliness of distributing weeklies from a far is not as critical as it would be for a metro daily. Again, the deadline issue alone would be a big impact on news quality before you ever start to debate the delivery impact. Just sayin..
Wow, I just want to say that there are some really smart comments in this thread.
ReplyDeleteLet’s hope someone tells Duke that Western Ave’s power needs will be significantly reduced with this change else Buchanan will have to add significant more costs to her production shutdown estimate…(a costly error when the weekly plant at Para Drive was shut).
ReplyDeleteThis is not a bluff. They're doing everything they can to get everything out of Cincinnati. The once proud Grand Ole Lady on Vine St. is truly now the Nightmare on Elm St.
ReplyDeleteThis is not a bluff. If the press breaks enough, there are all kinds of reasons to go elsewhere. I am no fan of Margaret or the Enquirer. Break the press enough and have enough late deliveries. At that point is it financially responsible NOT to go elsewhere?
ReplyDeleteIf there is one thing the folks in Cincy are, it is stubborn. If they were forward-thinking and wanting to keep their jobs, that press could have rocked. On the other hand, the production leadership (namely the VP) envades all sorts of change. MB isn't smart enough to see that and simply shuts down what doesn't work. On this point, I give Margaret much credit--get rid of the useless...
The number one reason for this move is the age and cost of maintaining the existing press in Cincinnati. It needs replacing, or they need to move production elsewhere. They were going to replace it with a Berliner press, but at this point they don't want to put any more capital into new presses, anywhere. This seems like the best move.
ReplyDeleteAdding to 4:32 and 5:04 comments... if the "brotherhood" is all about making sure there is a random issues with the press stoppages, well... there are many good reasons NOT to invest in Cincinnati and every good reason to get out.
ReplyDeleteBTW: I believed in Unions once. Time and the Enquirer taught me how wrong unions can be.
The move from Cincy to Columbus is no different than painting a house before putting it on the market. The entire printing operation under USP is being bundled and positioned so that all printing presses and the 10,000 people associated with them can be sold off.
ReplyDeleteoffing $85,000 to life time job holders in cinn all others 2 weeks for every year up to 52 weeks
ReplyDelete