Corporate America Sends a Labor Day Message
Labor Day, Sept. 5, 2011
For most Americans, the only significance of Labor Day is that it concludes a three day weekend.
For Kirk Artley, it means he has about six weeks left of employment.
On Aug. 24, RR Donnelley, a Chicago-based megacorporation that claims to be “the world’s premier full-service provider
of print and related services,” told Artley and the other 283 workers at the Bloomsburg, Pa., plant that “economic
conditions” forced the closing of the book printing facility. The workers said they would take significant pay cuts if
that would save the plant. RR Donnelley rejected the offer.
Most of the workers live in Columbia County, a small rural county of about 65,000, with unemployment about 8 percent,
slightly less than the national rate. Adding 284 persons would significantly increase that rate.
Under the termination agreement, the workers, both management and labor, wouldn’t have priority rights to bid for jobs
at any other plant. “We were told we could apply for open jobs just like anyone else,” says Artley, a bindery technician
and president of Local 732C of the Graphic Communications Conference, a Teamsters division. Apparently, there was no way
to integrate a couple of hundred workers into a corporation that employs about 58,000. What the corporation that had
about $10 billion income last year did agree to do, after negotiations with the union, was award severance of one week
pay for every year of service, and to pay for half the health insurance for up to nine months, depending upon length of
service.
The corporation told the workers the Bloomsburg plant was no longer profitable. They claimed there was no way the
Bloomsburg plant, with its eight rotary offset web presses and five bindery lines, could be competitive in an industry
that was moving to digital books. They said other plants would absorb the work. If the company had even contemplated
changing the nature of production at Bloomsburg to deal with a changing industry, and re-training the workers, that was
never made known to those still employed. Every day, the workers did their jobs, put up with Management, and then went
home.
By federal law, there has to be a 60-day notice to the workers. But there is no law to require corporations to tell them
the truth.
Contrary to corporate statements and a popular belief that print books are doomed by the emergence and significant
increase in publication and sales of digital books, there is still a consumer interest in print. Overall, about 2.57
billion books were sold in 2010, a 4.1 percent increase since 2008, according to data compiled by the Association of
American Publishers (AAP). Net sales revenue last year was $27.94 billion, a 5.6 percent increase from two years
earlier. The AAP reports there were 603 million copies of trade hardcover books published last year, a 5.8 percent
increase from two years earlier, with net sales revenue up about 0.9 percent. For trade softcover books, sales were
about one billion copies, up 2.0 percent from 2008, with net sales revenue of about $5.27 billion, according to the AAP.
The only significant decrease was mass market paperbacks (sometimes known as the supermarket or rack paperbacks). In
2010, net unit sales were 319 million, a decrease of 16.8 percent from 2008; net revenue was $1.28 billion in 2010, down
13.8 percent from two years earlier, according to the AAP. The Bloomsburg plant printed Harlequin romances and some
other mass market paperbacks, but they were a small part of the overall production.
RR Donnelley itself, with assets of about $9 billion, is profitable, although its stock has had wide fluctuations in
2011. Its net sales for 2010 were $10.02 billion, up from $9.86 billion the year before. For the first half of 2011,
Donnelley had net sales of $3.86 billion, up about 5.7 percent from $3.65 billion a year earlier. Its second quarter net
sales were $2.62 billion, an 8.6 percent increase from a year earlier. The company CEO, Thomas J. Quinlan III, earns
about $2.6 million in total compensation, with a five-year combined compensation of about $13.6 million, according to Forbes. In contrast, hourly workers in the Bloomsburg plant received an average of 1-2 percent pay raises each year.
“Just last month, the company told us we were profitable, that it had no plans to close us down,” says Artley, “and now
they say we aren’t profitable?”
No 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, Ind., or Harrisonburg, Va., 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, Pa., 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, Va., 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 new 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 hundreds who applied for the few dozen 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.”
Mentally and Physically Exhausting
Mark Harris recalls that in addition to good wages and benefits, Haddon provided the “little things that helped our
morale,” including company-paid Christmas parties. However, Donnelley cancelled the Christmas party and all other
socials. “If we wanted a Christmas party,” says Artley, “we had to set it up and pay for it ourselves.”
But, with a physically demanding 13/1 schedule, parties were rare. With few exceptions, hourly employees, most of whom
stood most of their shifts, were required to work 13 straight days with one day off, beginning in the late 1990s. Many
worked double shifts. “You don’t mind it if the business is dying, because you do what you have to in order to make it
work,” says Zeisloft, “but this was a profitable company, and there was always work.”
During the past few years, Donnelley cut back on the 13/1 agreement, but would resort to new contract language that
limited hourly workers to “only” 311 days a year. Families, especially the younger ones, became used to a good annual
income. They did not get used to the reality that there was little family time or that there was significant physical
and mental stress because of the work conditions. Even if there was a reduction of printing contracts, the company
apparently had plans only to reduce forced overtime, not eliminate it. “We looked forward to June and October,” says
Zeisloft, “because those were the slowest times during the year, and we could be with our families more.”
Blocking and Stalling
Management tended to “blame everything on the union,” says Harris, who had been at the plant 32 years. Under the union
contract is a three-step grievance process. If a problem couldn’t be resolved at one of three levels it went to
arbitration. Under Haddon, problems tended to be solved internally, says Mark Harris. But under Donnelley, there was “a
lot of blocking and stalling,” with some grievances taking as long as three years before going to arbitration. In some
cases, says Harris, the union couldn’t afford the cost of arbitration, especially when faced by a corporation that
seemed to have endless legal resources and the desire to never admit it did anything wrong. Nevertheless, the union,
says Zeisloft, “fought as hard for the non-union workers as it did for its own members.”
The corporation’s blatant anti-union attitude was clearly seen in 2007. The United Network International (UNI), a
federation of more than 1,000 unions representing 20 million unionized workers on four continents, had sent three
detailed letters to Thomas Quinlan to request a meeting to discuss workplace conditions in the corporation’s overseas
plants. The alliance specifically wanted to talk with the CEO about following the recommendations of the International
Labour Organisation and various national laws about the rights to join a union, bargain collectively, and issues of
discrimination and child labor. Quinlan ignored the letters. In May 2008, a delegation from UNI and the Teamsters went
to the Chicago headquarters to meet with Quinlan. They left a letter of concern with an assistant; Quinlan had refused
to meet with them.
The corporate attitude to workers, reflected in numerous ways in Bloomsburg, extended even after the closing was
announced. On Friday, Sept. 2, the state sent a Rapid Response Team to Bloomsburg. The purpose was to give the workers
information about numerous social services available, to discuss government benefits, including unemployment, and to
help them find other work. At a preliminary meeting, with four union officers and three from Management, the team
outlined what it wanted to do and to secure the company’s assistance. According to those who were there, the Human
Resources manager, who was also on the list to be terminated, asked how long the meeting with the workers would be. She
was told it would be 90 minutes. “Can it be done after work hours,” she asked, “because we have production goals to be
met.” She was told by one of the state employees, “You’re not going to like this answer. You can pay now or you can pay
later,” referring to the reality that the longer workers were unemployed the more RR Donnelley would be paying its share
in unemployment taxes. “We were all surprised at her question,” says Artley, but they were even more surprised by what
she said later. Reaffirming a Management attitude, she suggested, “Can we send these [workers] back to the floor . . .
because we have production goals to meet.” The planning meeting ended at that point. “We stood outside just shaking our
heads in disbelief,” says Artley.
Rhetoric is all that it Is
Kirk Artley is 56 years old. Like most of those who have been terminated, he’s not old enough to retire; in a nation
that values youth, he’s not a prime candidate for employment, no matter what his competence and experience are. But,
he’s more worried about his co-workers. “They have mortgages, they have bills like everyone else,” he says, “and now
they’re out a job in an area that has few new jobs.” More important, most of those terminated are not only skilled
labor, but have a long history in a highly technical field. Their knowledge and abilities will be lost if they are
forced into other employment.
In the RR Donnelley Corporate Social Responsibility Report are four guiding principles. One is “Treating others the way
that we want to be treated.” It’s nice rhetoric. If it were true.
*************
Bloomsburg plant management referred all calls to the Chicago headquarters. Three calls in a week to the Chicago
headquarters for comment were not acknowledged or returned. Most workers at the Bloomsburg plant who voluntarily talked
about the problems and issues asked that their names be concealed. Many refused to talk until after Oct. 24, the final
date of their employment. One worker said, “You never know what they could do to us even in our last month there.”
Another said his reason for not saying anything was, “They could fire me and deny me the severance benefits,” even
though he and the company had signed a severance agreement. That fear of retaliation, whether real or perceived, was
seldom seen under the management of Haddon Craftsmen.
Walter Brasch, a retired professor of mass communications, is a syndicated social issues columnist, and a member of The
Newspaper Guild/Communications Workers of America, Authors Guild, and National Society of Newspaper Columnists. His
latest book is Before the First Snow: Stories from the Revolution, available through bookstores, Amazon.com, or the
publisher’s website, www.greeleyandstone.com.