Quebecor World retrenches in Buffalo Niagara region

Quebecor World's decision to cut 200 jobs, or a a fifth of its workforce at its Depew printing plant in the Buffalo area has come as a real blow to upstate New York and Erie County, which depends on such high wage manufacturing job, according to a story in the Buffalo News.

Kevin Clarke, the president of Quebecor World North America's book and directory publishing services group was said to rarely let an opportunity go by to rail against what he thought were New York's high business costs (taxes, electricity and regulations) and how they make it hard for companies here to be competitive.

The announcement about the Depew plan "was another dose of sobering news for the Buffalo Niagara region, which has barely been able to muster any job growth since the recession ended almost five years ago," said the story. "And it was another sign of the struggles facing the region's manufacturers, which have been decimated by intense competition from Third World countries and other low-cost parts of the United States."

The immediate catalyst for the local job cuts was Quebecor World's impending loss of AAA TourBook production to a sister plant in Corinth, Miss., that is expected to be completed by next May. The Depew plant currently employs 875 people and layoffs are expected to begin in December and be spread out over several months, said the story. Restructuring goes beyond the local plant, it said, which also makes paperback books, board books, coupon books and newspaper inserts. Quebecor's profits have dropped for five straight quarters after the company lost three major clients last year and price competition intensified, analysts say.

Quebecor has been struggling "to adapt to the difficult conditions within the print industry," said Matt Wilcox, an analyst at KDP Investment Advisors in Vermont, in a report last week.

To adapt, Quebecor has been revamping its printing operations in North America and Europe. It's closing a magazine plant in Brookfield, Wis., and a book printing facility in Kingsport, Tenn., eliminating a total of 735 jobs. The company late last month said it would cut another 150 jobs by shutting a magazine plant in Red Bank, Ohio, and shifting that work to a nearby facility in Lebanon, Ohio, and other company facilities. Over the last five years, Quebecor has slashed more than 12,000 jobs worldwide, or about 28 percent of its work force, the article said.

The two-pronged restructuring strategy also has Quebecor investing heavily in new equipment, including the purchase of 22 new printing presses, according to Adam Shine, an analyst at National Bank Financial in Canada, who likened the company to a "falling machete" in a report earlier this year. None of the major equipment purchases revealed so far have been earmarked for Quebecor's Depew plant.

"As part of that $330 million North American investment plan," said the story, "Quebecor also is trying to boost its efficiency by shifting its assets to bigger, more specialized facilities.

"Quebecor officials believe the plan will put the company on the right course. But last week's news makes Quebecor workers here understandably nervous about whether they'll be around for the ride."