Corporate America Sends a Labor Day Message

rr donnelleyNo well-run corporation makes a decision in less than a month to close a 370,000 square foot plant, with an estimated market value of about $8.4 million. But, that is what the corporation wants the workers to believe. The union did get Donnelley to agree it would not shut down the plant and then re-open it and resume printing books. There was no corporate agreement that it wouldn’t “re-tool,” and establish other printing or digital services. And there was definitely no agreement to retrain or rehire any worker. Based upon past practices, RRD Donnelley is more likely to try to sell the empty building and land.

A clue to what the corporation was going to do may have been disclosed in October 2010 when it trumpeted that it had developed the ProteusJet, high-speed ink jet printers, and was shipping one a month to various plants. The printers were designed to handle short run and one copy at a time print-on-demand publishing. None of those printers were scheduled to be delivered to Bloomsburg.

Bloomsburg still produced several long-run publications for major publishers, including the Idiot’s Guide and Twilight series, as well as several fiction best-sellers. But, it was developing a specialty as a short-run printer (generally 1,000–3,000 copies of a title), with a three-day turn-around. In the current book industry, shorter runs with faster turn-around times are becoming more of an industry standard, especially with the rise of more small independent regional publishers. Yet, Donnelley was closing a plant that could have been part of a major expansion to meet the new publishing platforms. “That’s one of the things that baffled us,” says Artley.

At its peak, the Bloomsburg plant was averaging about seven million books a month; that number dropped to about two million a month, and then picked up to five million in August. Although Donnelley kept reaffirming that the change to digital technology, combined with a decreasing economy, were the problems, there are other truths it didn’t tell the workers.

Undermining Its Best Customer

Lower production in Bloomsburg could be because RR Donnelley sales people were leading some potential customers to the company’s Crawfordsville, Indiana, or Harrisonburg, Virginia, plants. However, one major customer balked at moving the contract. The Penguin Group, one of the five largest publishing conglomerates in the world, wanted to keep a major part of its production in Bloomsburg. Penguin, which owned one of the presses and one of the bindery lines in the Bloomsburg plant, accounted for as much as three-fourths of all titles produced in Bloomsburg, according to Artley.

One critical issue for Penguin was that RR Donnelley wanted to determine where the books would be printed, perhaps yet another sign that it was planning to phase-out Bloomsburg production. One source in Donnelley management who is familiar with the Penguin situation, and who asked that his name not be used, says that the publishing company preferred the quality produced at Bloomsburg, and the close access to its distribution warehouse in Pittston, Pennsylvania., about 50 miles northeast of Bloomsburg.

The Bloomsburg plant is also close to I-80, a major interstate that connects the New York City metropolitan area with San Francisco. The union had even agreed in January to extend its current contract, and then signed a two-year agreement, assuring Penguin executives there wouldn’t be any labor issues in Bloomsburg. About that time, Donnelley finally agreed to allow Penguin to have its books printed in the Bloomsburg plant and signed a two-year contract. The closing of the Bloomsburg plant, and requiring Penguin to have its books printed in Harrisonburg, Virginia, and then shipped about 300 miles northeast to Pittston, would increase transportation costs about three times, according to one person familiar with the contract. Because Penguin signed a two-year contract with the assurance that books would be produced in Bloomsburg, it would be justified to declare a breach of the contract and move its work elsewhere, or to demand financial considerations from Donnelley.

‘More Interested in Profits than in the Workers’

In 1993, RR Donnelley bought Haddon Craftsmen, which produced numerous books that reached best-seller lists, and which had developed a reputation not only for high quality printing but also as a good place to work. Haddon Craftsmen had begun during World War II as a merger of three companies. The Bloomsburg plant was added in 1964. In 1980, six employees bought Haddon, which now had plants not only in Scranton, its main plant, but also Dunmore and Allentown. Sullivan Graphics bought the company in 1989 and then sold it to RR Donnelley four years later.

Within two years, Donnelley announced it was thinking about closing the 400,000 square foot press and bindery in Scranton, and unify all operations in Bloomsburg. Steve Zeisloft, a union officer for 10 years, including four years as vice-president, recalls Donnelley “essentially told us the company could expand if we worked with them, and if we didn’t they would shut down the plant and take the work elsewhere.” The threat of shutting the Bloomsburg plant, however, was undoubtedly a scare tactic. The Scranton bindery was in an old brick building; the Bloomsburg plant was newer, and had significant room for expansion.

Donnelley had several demands. It demanded government concessions and assistance. The Commonwealth gave the company $350,000; the county, local school district, and local township all waived taxes the first year and gave extremely favorable reduced rates the next four years. For the new contract with the union, known as the Green Contract, the corporation also demanded that most hourly workers take pay cuts, that they pay more for health care, that it would now take 15 years instead of 10 years for workers to earn a four week vacation, and that their union gives up the “closed shop” mandatory membership requirement.

Union workers would keep their jobs, but new employees would be allowed to choose whether or not to join the union. More important, new employees would not have to pay “fair share” contributions for representation, something common in unionized shops. Thus, the union would negotiate contracts, deal with workplace conditions and grievances, and provide for the common welfare of the workers, but receive no compensation from non-union members. In exchange, Donnelley agreed to increase the size of the plant and the number of employees. The “Green Contract” went into effect in June 1996, the same month the bindery expansion was completed.

Kirk Artley was one of more than a thousand who applied for a couple of hundred new jobs. He had been a Marine for 14 years and held jobs in other factories. The company, he says, “discouraged us from joining the union,” but like many, “I saw the necessity to be a member.” For the next 15 years, union- and non-union employees worked side by side. “We were family,” says one 30-year press technician, “and some employees saw a reason why the union was necessary.” Only because more than half of the workers were union members could Management not request decertification and the elimination of the union.

Several long-time employees say the atmosphere under the new owner changed. “The rules and regulations weren’t as stringent under Haddon, yet we still produced the quality,” says Mark Harris, a press technician who was union president 1998–2006. Donnelley “kept telling us quality is the most important part,” says Harris, “but at the same time they kept telling us they wanted more numbers.” Adding to the workers’ frustration was that most plant executives had never worked in production.

The new owners were “more interested in profits than in the workers,” says one 30-year employee, who asked that his name not be used. Another employee, who worked under Donnelley and the previous owners, says, “We did what we could with what we had, but you could only do what they let you do.” Artley explains, “We were constantly giving extra maintenance to the presses, trying to maintain quality.” Pride of workmanship was the main reason there wasn’t a significant decline in overall quality. Some of the presses were three decades old; with one exception, any “new” presses brought into the plant were already used. Because the four Harris presses were obsolete, says Artley, “we had to do our own machining to create parts.”

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Comments

  1. says

    In response to the article “Corporate America Sends a Labor Day Message”…it is unfortunate to see workers laid off, let go and bamboozled once again. My heart feels very sad that we can no longer trust establishments that in the past our education system and society has taught us we could. However the fact is that companies are in business to make a profit. The fact is we cannot trust them to see our value and benefit us-the worker. As a business owner who left the corporate landscape to pursue my own goals, I learned this hard fact – too early! The statistics were within the article were right on point but makes it very challenging too discern exactly what is going on with the company in regards to the workers because it focused primarily on the income but not the expenses being incurred. Technology is changing the employment landscape dramatically…and I know and have seen or heard too often…a person being replaced by a machine who can perform the work with minimum, if any error, works 24×7, doesn’t complain and no benefits are needed. The article left me saddened but with questions, such as;
    – What are we as a nation going to do to get our present workers prepared to compete in a very different landscape?
    – How are we going to overhaul our education system…so that future workers will be prepared for “thought careers”?
    – What can be done to help “individuals” understand that they must become CEO’s of their career?
    There is a mass execution of the common worker…and no longer any difference between being an employee and being a business owner…so we have to start managing our careers like a business. Selling our skills, talents and abilities as our business and how we deliver them as our product or service. Meaning we have to become experts within our chosen field or industry, we have to provide WIIFM (What’s in it for me?) value to our clients/employers and learn how to market ourselves through multiple platforms while aligning and arming ourselves with a powerful network who will ensure we are never in non-money making capacity. Until we learn these concepts these unfortunate stories will be heard far too often…that makes me very sad.

  2. La Rae Williams says

    Wow! It really spotlights your lack of understanding who these Men were if you think they would support your hate filled ideals and rhetoric that is designed to pit one person against another. They were about working together and protecting common rights, not scapegoating others…

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