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April
 2004






 

 

 

 

 

 

 

 

 

 


 

 

 


 

 

 

 

 

 

 



 











 



 

 

Afflicting the afflicted

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.