Archive for the ‘Technological Fear’ Category

Chinese Printers Play Dirty in Stealing US Customers

Friday, February 19th, 2010
Is it too late to turn it around?

It happened again in my area. Two more printers, and I’m not talking micro-shops, but printers with 40″ multi-color presses, full binderies, etc. closed their doors. These were plants that just a couple of years ago were thriving, hiring people, buying equipment, and taking care of business.

What happened?

We all know what happened.

  1. The US economy tanked. The US government, Banking, Financial interests, and Real Estate speculators combined to nearly drive us into full-blown depression.  The harm dealt to the printing business was both instantaneous and long-term. The instant effect was that companies, all kinds of companies, got scared. They pulled back their printing orders because that was the perceived easiest way to cut expense.
  2. The banks got scared. They decided to circle their wagons and cut off loans to the printers. The printers, that are generally small businesses, have shallow pockets. In an economy of falling sales they needed the banks more than ever. Help didn’t come.
  3. Direct mail campaigns were scrapped or delayed by marketers who turned to the Internet for cheaper CPM. Was this a wise move? We’ll see. Early wisdom points to DM as still a very viable tool. In comparison to the Internet, DM yields higher response numbers. Will enough customers return to save printing?
Is Printing a Bellwether Industry?

The United States IS heading toward becoming a third world economy.  If anyone wants to know what living in America will be like in fifty years, all they have to do is look at how the Chinese live now. This is the legacy we are leaving to our grandchildren. Think about it, manufacturing jobs have been fleeing our shores faster than a cat with its tail on fire. Our country has huge balance of trade deficits, and enormous national debts. It doesn’t take a genius to see that if you aren’t making any products, there aren’t any products to sell. Apparently the only products we can produce and sell are hamburgers and fries, and they don’t export very well. How long will it be before our citizens will have to go to other countries to seek employment?

This Brings Us to the China Question

What happens when we chose to buy from China, India, Mexico, or Pakistan?

  1. We put American citizens out of work. I had a very kind, considerate person whom I have known for a quarter century, or more, say to me that Americans can find other jobs. Even if they have to work for minimum wage there are other opportunities. Maybe they are just lazy. Maybe they could. Just maybe they could go to work for minimum wage when they used to earn much more. What will they be able to spend their minimum wage salary on? A home — nope. A new car — nope. How about college education — no way. Minimum wage isn’t even enough to survive on, and barely surviving is what they do in third world economies. Every well-paying job that is eliminated hurts the entire economy and drags us step-by-step into inevitable decline. If you think Katrina was a disaster, just wait and see what a US economy will be like without a middle class.
  2. What about Chinese families don’t they need to be employed too? Sure they do, and we all feel for them, but if we take the food out of the mouths of our children to feed theirs, our children will starve. Can you visualize it, a neighbor, or a relative’s children dying because the work they could have had went out of the country? We have a global responsibility it is true, but our first responsibility is to our family, then our neighbors, then our communities, then our states, then our nation and finally the world. We’ve been doing it backwards!
  3. Isn’t it too late? Don’t we already drive foreign cars, wear foreign clothes, and shoes? Even Hershey chocolate is now made in Mexico. If we are already buying these things out of the country why not buy printing out of the country too? Anyone who accepts this line of thought needs to go back and read point No.1. This is the moral equivalent of saying that since murder is committed regularly in our cities it is all right to commit murder. No it isn’t. Just because a terrible thing has been happening doesn’t make it right! Moral people do whatever they can to stomp out wrongs, they don’t justify them and they don’t, for heavens sake, participate in them.
  4. Business people who buy from China forget what they saw when China hosted the Olympics. The world was only allowed to see what the Chinese government wanted reveal. They even censured the Internet. What is China hiding? They wanted us to believe that everyone was happy. That the country was clean, prosperous, and healthy. Is it? The loss of our jobs and the expenditure of our dollars don’t go to the people who really need it. It goes to the upper class, just like it does in the US. We discovered that when we bailed out the big banks and they rewarded themselves with BIG bonuses! The difference is we are allowed in this country to see the disparity between rich and poor, but the poor in China are hidden by the government.
  5. Don’t forget that Chinese businesses are guilty of serious crimes and injustices in their rush to grab all they can at the expense of their disadvantaged employees and helpless competitors.
  • They pay very poor wages bordering on slave labor — pennies per hour
  • They employ children. Impoverished children must work to help support their destitute families.
  • They use toxic materials like lead based paints and inks. Remember the problem with Mattel and the recall of millions of lead painted toys?
  • They substitute cheaper materials for the specified ones like in the wallboard fiasco.
  • They have very foul working conditions.
  • They have few, if any, environmental concerns or laws.

Is it moral to send work out of this country to benefit another, especially when you know that their workers are subjected to the rankest of conditions and living on poverty wages? They gave me a good price, and everyone else is doing it, aren’t very good excuses. Those American business people who are buying from the Chinese and are destroying the economic future of this country for a good price should hang their heads in shame. The karma they are creating will return, if not on them, then on their children or grandchildren. What moral person could live with that over their heads? I know couldn’t.

So is buying Chinese printing killing US printers? Yes it is, and it is killing our very way of life. Short term expediency will never justify the long term harm. Think about it. Think about it very hard and then choose to buy American. Our very way of life depends on it.


It’s the Market, Stupid!

Thursday, April 2nd, 2009

It’s not “the economy, stupid” it’s the market. Maybe the phrase should be it’s the market, stupid. Printing companies have been dropping like autumn leaves with no immediate end in sight. According to the NAPL, the future is looking “dim” (my word, not theirs). They expect that a minimum of 4,000 printers to as many as 10,000 will shut down over the next 10 years. Over the last 4 years we saw a decline of 4,800 plants with approximately 150,000 employees. Since 1994 we experienced a loss of over 11,000 plants.

What does all of this mean? It means that the current state of the economy, while rough, isn’t the real reason for the decline in the industry. That’s why I say it’s the market, stupid! Thanks to the Internet,the methods we have used in the past to communicate with one another are withering away. For example:

Newspapers: Major metropolitan newspapers have hit very hard times. Some have already closed shop and many more are about to. It doesn’t take a very clear crystal ball to see that those that continue to exist will be very different from the newspapers of yesteryear. Why? Craig’s List, and other free online classified services eroded the base revenues for the papers. Who would pay for something they can get free, and that has larger reach? Also, every newspaper now publishes their content online. You can do more on a web page than a print page–it’s more flexible. For example you can beef up your story with graphics and movies  on a web page. It’s also timely. Hot news can be displayed on the website within minutes, instead of waiting hours for the next edition to hit the streets. We have no patience.

Magazines: Reuters reports that, “Newsstand and retail sales of U.S. magazines fell 11 percent in the second half of 2008, with celebrity and women’s titles taking a hit as supermarket and drugstore shoppers cut back on spending.” Furthermore, “Fifty percent of all magazines are sold in supermarkets, and obviously those types of places took a major hit.” If the decline in single copy magazine sales is because of the economy, will we see a rebound when the recession ends? And more importantly, when will it end? Again looking through my rather murky crystal ball, I predict many titles disappearing, and those standing will see sharp decreases in readership. Printers relying on magazine printing will be hard hit.

Books: Booksellers report decreases, with the exception of Amazon Media who appears to be up. Amazon is invested deeply in electronics. The Kindle reader entirely eliminates the need for printing. Amazon has also benefited from third party sales (see my For Your Consideration Page on this blog). It is estimated that 1 in 3 books sold at Amazon is actually sold by a third party. Smarter marketing is bringing them more business. Borders reported a loss and announced they are trying to sell their international operations and may sell the whole chain.

Direct Mail Marketing: I was once told by Peter Harrison, a direct marketing expert who is now running Affiliate Crew an internet company, that “Everything that goes in the mail must be printed.” What happens when mail volume goes down? Think about it, banks and other financial organizations have gone paperless. You don’t mail in your bills anymore, you authorize payment on-line. Envelope printers have suffered because of this. Forms printers have also felt the effects. What about other direct mail campaigns? The US Postal Service keeps increasing rates as more and more direct mail companies discover other marketing avenues. The ones left in the game will  bear ever heavier a postage burdens. Once the cost of postage reaches the proverbial camel’s back, the direct mail business will be through. Kaput. What will the post office have to do then, personal letters? Even with my cloudy crystal ball it’s as easy as seeing the housing boom collapse. Really, who didn’t see it coming with overinflated prices, and interest rates at 1%?

Catalogs: I had trouble finding some figures for catalog printing, but I can tell you that the catalogs are pushing web sales more and more. If you think about it they face similar challenges to newspapers. You can just do more on-line to show off your product than you can in print. Why not video the item, particularly clothing, so you can see front, back, and side? Once holographic technology is here the public will insist on 3 dimensional views. It’s just around the corner.

Wedding Invitations & Announcements: I’ll admit that invitations and announcements have never accounted for a big slice of the printing pie, but those printers specializing in them have been hit hard. Why? It’s because people have access to paper options, graphic design programs, and digital printing. They create their own invitations with their own style and creativity.

NAPL also reports that only [are the] larger plants growing in number. Those printers without deep pockets will be swallowed by the others. It’s the law of the jungle. The downside is that more print industry employees will find themselves unemployed. What are their options in the new economy?

Like the dawning of the Industrial Age big changes are happening, but at a much faster pace. What will it be like when clouds in my dirty crystal ball clear? I just don’t know–do you?

Perspective Alters Perception

Tuesday, March 10th, 2009

In my career I’ve had the good fortune of playing more than one side of the fence. I’ve operated a press. I’ve purchased printing as a customer when working at an advertising agency, and I’ve sold printing for heat-set web, and sheet-fed shops. Each change at the time came with its own drama, I was fired, laid-off, or resigned. The emotions were intense, but given enough time the emotions disappear. All is forgiven.

Here is an odd phenomena to contemplate, when you look forward at the beginning of your career you see the zig-zag steps you’ve taken as being out of control. When you look back, however, the career bumps and changes  form a straight line. You are today the result of those learning experiences. Perspective alters perception. It’s a little like the nature of time. When you are young, time wears on forever. As you get older time speeds up.

Where am I going with all this philosophizing? Good question. I wasn’t sure myself until I got into to it. The printing communication arena is changing faster than we are ready for it to change. Technology is coming that will blow our minds. There are two ways we can deal with it. We can grip tight and cling to outmoded business models, or we can throw caution to the wind, and go for it. You know, the only thing to fear is…(fill in the blanks)________     _________. We do not need to fear technology, we just need to figure how to turn it to our advantage.

I found this online article that explains my point. Even though it was written in 2006, and the examples cited are old hat, the thinking behind the marketing innovations is what is important.

Performance: Technological advances must be part of strategic planning Published October 12, 2006

Business owners often ask about technology’s strategic role in a business. Most companies would say that technology is not core to their business, but would say technology is “strategic” to their business. In Jim Collins’ seminal book, “Good to Great,” he addresses the role of technology in great companies by saying great companies adopt technology differently. “In great companies, technology is an accelerator, not a creator, of momentum.”

Technology is an enabler for business, so much so that it can be at the core of disruptive business models that emerge when technology is innovatively applied. Here are some examples.

Technologies can impact business models

Consider the movie rental business. Remember your independent video rental stores in the 80s?  They’re gone because Blockbuster took over with well-lit, well-stocked video stores blanketing every community. They are now being challenged by Netflix, which uses an online business model executed with technology and complex logistics. Netflix, for a flat monthly fee, allows you to have three rentals outstanding with no late fees, a much larger inventory than a local store and next day turnaround via mail.

Sensing a threat, which was both disruptive and technology-centered, Blockbuster responded with Blockbuster Online, which combines the NetFlix model, and four free local rentals per month at retail stores – something that is important if you are looking for the latest movie or want a spur-of-the-moment rental. Blockbuster’s strategy of tying the program back to local store visits can’t be matched by Netflix, assuming Blockbuster can execute the online program.

Think about digital photography’s impact on Kodak’s film business, the neighborhood film processor and Walgreens. Digital photograph technology has been causing massive disruption for more than a decade. With digital photography, you no longer create bad prints, you don’t buy film and it’s easy to share pictures with friends and family by posting them online. You can print at home or purchase prints online.

Kodak participates in this new model by creating and distributing EasyShare, an online picture portal that’s almost as inexpensive as printing at home. There’s no charge for using the software – they make money printing pictures on their paper.

And what about Walgreens (a “Good to Great” company, by the way)? How do they compete in digital photography? Walgreens created a software system similar to Kodak’s. And like Blockbuster, Walgreens leverages the value and same-day convenience of the local store. You don’t wait for the mail, you can pick up your high-quality prints (on Kodak paper) in one hour.

Phil Mydlach is the owner of Mydlach Management Advisors (mydlachmanage, a corporate planning and performance improvement practice in Waukesha. He can be reached at (262) 662-4646 or

© Copyright 2009 BizTimes Media LLC

When you look at it with the right perspective you understand that the job of technology is to change things. Some ways of doing things will disappear and just as surely as I’m sitting at this keyboard some industry will go to Washington with its hand out begging to be saved. When they should have, and I’m talking now about GM (General Motors), led the technolgical wave. They had the electric car years ago and instead of running with the technology they crushed it.  To see the video go to It’s an eye opener.

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