Afflicting
the afflicted
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By Chuck
Moozakis
Editor-In-Chief |
As
Finley Peter Dunne once penned, “The job of the newspaper is to comfort the
afflicted and afflict the comfortable.”
Somehow
that’s changed - at least as far as some newspapers’ treatment of vendors is
concerned.
Instead
of afflicting the comfortable, a disquieting number of newspaper execs want to
afflict as much pain as possible on suppliers whose financial positions are far
from comfortable.
It’s
been seven months since we originally wrote about the inherent dangers
associated with squeezing vendors too tight. In the short run, newspapers may
indeed get the prices they demand, but long-term, a supplier whose earnings are
slashed too sharply by repeated hammerings at the hands of cost-obsessed
customers may not have the financial wherewithal necessary when those customers
need additional service and support years down the road.
Ironically,
negotiations between newspapers and vendors have become more tenacious even as
the industry’s financial fortunes begin to take a turn for the better.
Percolating
demands by advertisers for more color, more inserts and more accountability
means newspapers have to invest in technologically sophisticated hardware and
software to accommodate those requirements.
In
turn, vendors are anxious to sell the equipment and systems they’ve developed
to satisfy those needs. Of course, nobody is forcing them to drop their prices.
It’s difficult to walk away from a potential sale, even for vendors that
realize that they are cutting their margins razor-thin in the process.
While
we’re on the subject of competitive pressure, consider our Page 1 story
examining Goss International Corp.’s pending acquisition of Heidelberg’s web
press and U.S. postpress units and Agfa-Gavaert’s purchase of Lastra SpA.
Heidelberg
threw in the towel after losing more than $180 million in its web press unit
over the past two years, according to U.K.
publication PrintWeek. Web unit revenues, meantime, dropped 50 percent,
according to a company spokesman.
Goss,
a company that has its own battles to fight as it attempts to reclaim the
pre-eminent position it enjoyed before its 1999 bankruptcy, will now have to
proceed carefully as it blends two corporate cultures and technologies together.
We wish Goss’ execs the best.
So,
too, to Agfa’s brain trust, which engineered the addition of Lastra’s
Western Lithotech line of plates and associated computer-to-plate technologies
to Agfa’s lineup of CTP and plate products.
At
first glance, the marriage makes sense. Agfa has begun to focus more of its
efforts on violet-based CTP technologies while Western has preferred to
concentrate on green laser systems.
Customers
who were buying plates from Western Lithotech might be concerned that their
source of supply has been whittled by one. But Agfa has said it would maintain
Lastra’s existing facilities, staff and technologies.
Whether
the Goss and Agfa acquisitions will herald a new round of consolidation among
newspaper suppliers is yet to be determined.
But
as long as prospective buyers keep a tight rein on their wallets, the urge to
merge might be the only viable option for some vendors to consider.
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