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.

Almost all paper is made from either wood pulp, cotton, or a combination of the two. It’s not the base that is the significant factor in the wide variety of paper on the market. The processing at the paper mills makes all of the difference. Developing a new product line is a monumental task. Decisions have to be made at the very beginning. For example, before sheet one is produced, marketing must be considered. Who will buy this paper? Will this new line increase total sales or erode sales from another paper in our product line? How much will it cost to make it, including possible new tooling? How do we position this paper in the marketplace? What will we emphasize most, price, uniqueness, printability, or quality?

Why should the paper making issues  make any difference to you as a consumer? If you were to see the figures the printer has to consider in estimating  a printing bid, you would note that the cost of paper is routinely 30-60% of the cost. The bigger the job the greater the percentage of paper cost. Why is it so much? In addition to all the R&D, the short answer is that it takes a big expensive facility to manufacture paper in the volumes needed to supply the needs. Just how expensive? The cost of building a new mill today is well over a billion dollars. To give you an idea of how much real estate is needed for a typical mill here is a photo of  the Blue Heron Paper Mill in Oregon, USA.

Blue Heron Paper Mill

Paper mills have been subjected to the same pressures we all experience in this business climate. Their manufacturing costs have increased dramatically, in part because of  raw materials. Environmental laws have made harvesting of trees more expensive, and mills have been forced to comply with demanding clean air and water regulations. Regulations which have forced retrofitting the plants with new equipment to meet EPA standards. Some mills, unable to afford the retrofits have shut down. Mills in United States face world wide competition that keeps the sell prices low even in the face of these higher costs. So the paper mills are squeezed.

Again, why should this matter? It matters to all of us because we have enjoyed a golden age of amazing paper options. If new mills are unable to be built, and older mills close up shop, the availability will decrease. In steps that old law of supply and demand, with decreased supply, a steady demand will force the costs up. The final buyer of printing will see their printing bills increasing, and more companies will  consider options other than printing. When companies slow orders of printed materials, printers will suffer. With a drop off of paper orders, more mills will close. It’s the proverbial vicious cycle. I don’t know about you, but I’m not quite ready to see printing become a quaint curiosity is some dusty museum. There is still something  to be said about the feel and permanence of a printed piece that just can’t be duplicated with electronic blips on a computer monitor.