When your company is in a struggling industry with high capital costs and price competition is rampant and you’re dealing with extremely high labor and material (fuel) costs and you are highly regulated, it’s never a pretty picture (ask anyone in the printing industry).  Given that many of AMR’s major competitors (US Air; United; Delta) had already gone through bankruptcy reorganization, it was just a matter of time until AMR faced the inevitable.

Although we’re dealing with issues on a totally different scale, I see lessons that our industry can learn from this debacle, but I’m saving that for next week.  Stay tuned.

As I shared with a young lady (OK, she was my mom’s age) at the airport – flying is not fun – but it is part of the job and complaining about it doesn’t make it go away.  Am I complaining?  No, I am “venting,” which according to my counselor spouse, is good for me, and probably healthier than having a double of Maker’s Mark.  Although that does sound pretty good.

The conference had a nice blend of “experts” such as economist Dr. Lowell Catlett from New Mexico State University and ITR’s economist Alan Beaulieu along with a variety of industry speakers covering transformation, marketing, and strategic issues. What were the take-aways? There were many, but here are mine:

MSPs — The concept of becoming a marketing-services-provider may not be “the” solution. Yes, there are some successes, but the needle is moving very slowly (because customers are not readily adopting). Also, if a company is going to take that route – they MUST be channel agnostic. Thus, if the customer’s marketing solution is not using print, that must be the solution. Many firms who have made an investment in print technology may find this path un-acceptable

Economy - 2011 is going to be an OK year, but don’t expect a lot of change from 2010. 2012 and 2013 will be much better BUT inflation is going to change the way we think and behave over the next 2-3 years. Globalization will continue to have an impact on our economy and industry as the BRIC countries (Brazil, Russia, India, and China) will continue to grow at rates much faster than the U.S. This will provide challenges as well as opportunities.

Digital vs. Litho – Yes, the change is happening, but the experts don’t see a “tipping point” for decades, but expect the total number of pages printed by the industry to continue declining.

Strategic Planning – More than ever before the need to strategic plan is crucial. Yes, being an MSP is not necessarily “the solution,” but neither is staying the course. Digital print technology will continue to grow and provide solutions for many companies. Providing customers with solutions, not “just printing,” becomes important for firms to grow in our industry. More than in the past, the rising economic tide will NOT raise all boats. There will be winners and losers and that will be dictated by markets served by the company and its ability to focus on the customers’ marketing/print requirements.

Workforce - Over the next five years, as we start adding employees, the type of individuals hired will be very different than in the past. Individuals must be flexible and have an ability to learn. The concept of someone being a “pressman” or “cutter operator” for decades will not represent the employee of the future. Our industry will also have to compete with many other industries for top talent.

Of utmost importance, this conference provided the ability to share ideas with one’s peers and industry thought leaders which was unparalleled. Not only were there many of the owners/CEOs from many of the top commercial printing firms (of all sizes), but the top executives from KBA, Kodak, Heidelberg, Komori, HP, FUJI Film, Unisource, EFI, and many other industry suppliers were represented.

The Conference was rated as very successful by many of the attendees I spoke with – printers and suppliers, as well as the sponsoring association’s executives — Ralph Nappi (NPES), Joe Truncale (NAPL), and Mike Makin (PIA). Next year’s conference will be held February 19-22 at Marco Island, Florida. It may well be worth the investment.

On an industrial relations note, there are some interesting things going on with unions in the public sector, where practically all of the unionization growth as occurred over the past 25 years. With states talking about cutting and restructuring, union leaders are becoming  very nervous and are talking about unleashing $25 million to counter the  efforts of the states – who are doing the right thing to protect their taxpayers.  As most folks know, I’m not a proponent of organized labor.  It’s not that labor should not have a voice.  The problem becomes when compensation/benefits become institutionalized and when the business/government entity needs to make changes to survive, the labor institution would rather kill off the host.  There must be a better way.

Speaking of jobs.  The recent Republican budget proposal to cut $61 billion this year is an eye opener.  Which raised a comment, a valid one, from the Dems.  These cuts could represent upwards of 800,000 jobs.  So one must remember that cutting the deficit/government spending will create some nasty side effects.  Are we as a country willing to do what we have to do?  Do the politicians have the moxie to do it?  It could very well cost them their jobs.

And for you monetary/fiscal weenies (thanks for the article James), check this article out in WSJ’s Market Watch. I think the author addresses many of the issues which have created the imbalances between Wall Street and Main Street.  Although I tend to vote red, I do have a concern with Congress’ un-willingness to deal with many of the issues which got us in this mess.  I for one would like to see a new Glass-Steagall bill enacted – and we can thank our fellow Texan Phil Graham for the original bill’s demise.

The industry lost an iconoclastic voice this past week with the death of Dick Gorelick, one of the industry’s true marketing consultants.  Dick wrote a bi-monthly newsletter which he shared with several of the affiliates – and we used his thoughts liberally.  Most of Dick’s writings weren’t very friendly to the industry associations or the post office (his favorite target – after the airlines). Sometimes it hurt to read what he was saying – but there was a lot of truth in those comments.  More importantly he challenged his clients to find ways to differentiate their business in other ways than buying more equipment.  His voice will be missed.

I’m headed to Washington D.C., as the Print Council’s Ben Cooper used to title “Fantasyland on the Potomac.”  For those of us who follow our nation’s politics, I’ve become somewhat jaded over the past decade as I’ve seen polarization set in, which is not good for this country regardless of what side of the aisle you sit.  Regardless, it’s important that our voices are heard – today more than ever before.  And I challenge anyone reading this column to become active in learning about the real issues – not just what the talking heads or bloggers opine about.  More importantly make sure that your legislators hear your voice.  As a business owner, or as an employee in a small business your voice needs to be heard.  So, stand up!

Once this trip ends, I’m headed to Los Angeles. My father passed away two weeks ago, and we are putting his ashes to rest this coming Friday.  My wife and are the black sheep of the family.  We packed up our belongings and my parents first grand child and moved to Texas 32 years ago.  Liz and I are now the only non-residents of California (both my kids now live in SoCal, as the locals refer to that part of the Left Coast).  My dad was a blue-collar guy and union member, which led to some interesting conversations over the years.  But he listened and attempted to understand his “errant” son’s pro business approach.  More importantly he understood that the unions had lost their way as they became more entrenched in being an organization rather than working on behalf of their constituency.  That’s where he and I saw eye-to-eye. I will miss those conversations, which ended years ago as Alzheimer’s ravaged his memory and eventually took his life.  Your voice will always be with me Dad.

On another note of interest, we are beginning to see a flurry of business consolidations.  And there’s more to come.  Many company owners are coming to the realization that things are not going to get “better” as in the past.  Thus, some are considering exiting the industry while others are looking for ways to “acquire” sales.  In our industry, one which has a tremendous amount of overcapacity and “old” technologies, acquiring a business really means finding a way to add sales – equipment has no value. The real challenge is for the owner of the “selling” company to understand that his/her business no longer has the same value as it might have 5-10 years ago,  It’s not an easy pill to swallow.

The first is the “green” blogger who condemns all print.  This individual lambastes print as evil, but truly doesn’t do their homework.  This type of editorializing concerns me because more and more individuals deal in sound bites (bytes?) and thus don’t think beyond what they just read or heard.  Case in point is this site where the author shares this tidbit, “Nearly all the industries have their shares in polluting the environment but out of all the industries, the printing industry is the major cause to pollute the environment.”

Another recent discovery is the USPS’ “Small To Medium Enterprise Solution” project which will launch next spring on a trial basis in Austin.  Kudos to the USPS for trying to find ways to make direct mail easier to use, but this model is not one that is going to excite the vast majority of small to medium printers in the U.S. who are already fighting UPS, FedEx, and Staples for market share.

I’ll be the first to admit that there is no simple solution to this complete change in our competitive landscape – and there is not putting the genie back in the bottle.  Ownership and management must realize that selling is no longer just a process of discovering who is buying and providing them with a price.  It has become much more complex.  The selling cycle is going to become longer and the tools which we use to “sell” print are also much more complicated.  The old sales models are not going to work, and there are plenty of other industries out there with good models to copy.

Elizabeth Warren, who leads the congressional panel overseeing the Troubled Asset Relief Program, said U.S. taxpayer bailouts helped Wall Street and not small banks.  TARP “worked really well for the Wall Street banks, but it didn’t work well for the rest of the banks in the system,” she recently said on Bloomberg Television’s “In the Loop with Betty Liu.”

I hate to say it, but I think that our financial system is out of sync.

Meanwhile, the folks who make this country great, our blue collar workers and small business men and women are getting the short end of the stick.   Our politicians are not willing to find creative ways to help businesses and people, get off the sidelines.  There’s talk of more money for education, job creation, and small business lending.  Why not just stop writing laws for a while and let the system move forward.  Get creative with finding ways to support small and medium size businesses to get the money they need to start producing and hiring — and don’t expect it to happen overnight!  Too many folks in our country don’t understand that business (and consumers) won’t start hiring/spending until they know what’s going to happen over the next 12-18 months.  As long as the Administration and Congress keep talking about more laws and more deficit spending, more the reason folks will stop, wait and see.  Not a good way to kick-start an economy.

Last month I had a conversation with a member who against his better judgment decided to accept an invitation to be part of an online bid.  A project which normally billed well north of $1,000,000 ended up being “won” with a $300,000 bid.  Where’s the sanity in that?  In another conversation, this time with a well-established and well run inplant operation, their management was challenging their cost structure because more and more of their work was being underbid by the commercial market.  These symptoms of “dead printer walking” really concern me.

The assumption many of these “low-balling” (I’m using a nice phrase) firms have is that the economy will return to its pre 2008 hey-day and things will be great again.   My friends that’s not going to happen.  Today’s print market is at 2004 levels (per Dr. Joe Webb) and it will be many years before we see 2007 levels.  It’s time for our struggling brethren to REALLY look at their opportunities and realize that it may be time to hang up the spikes. 

For the health of the entire industry, companies can not continue to bid prices which just cover material, labor, and costs of their equipment debt.  Suppliers can not continue to extend credit to “at-risk” firms.  This not only jeopardizes their existence but creates tremors felt by the entire industry.  Manufacturers can not sell equipment based on making “the numbers” for the quarter.  And as hard as it may be, companies are going to have to walk away from business regardless how much they’re asked to meet the “low-ball” price.  Meeting that price is not a short-term win – it’s a long term loss.  What makes us think that customers are going to let the industry “reset” their pricing once “good times” are back again?  It’s a no-win situation.

The future of print is very viable if print providers have the profit margins which will allow them to re-invest in new technologies and create new business models.  That can not happen if dying firms are setting the price levels.  It’s time to break the chain.

Two dads and their sons are headed to “the friendly confines of Wrigley Field.”  The sons are somewhere in their late teens (it’s harder for me to tell ages now days), but they have something in common – the game. I’m eavesdropping and hearing talk about shortstops and range; OBP; who of their friends is getting a “ride” for their baseball skills, and who is/was a better catcher, Joe Mauer or Johnny Bench (my money is on Pudge).

I’m glad to see this connection which will probably become a common touchstone for all of them.  My grandfather and I had that.  Although he and I did not have a lot in common, and English was his second language, we had baseball.  I still remember him sitting in his favorite chair listening to his beloved Dodgers (in a Spanish broadcast, of course);  something he did every day during the season.  But it was this love of The Game, which connected us then and now.  And makes the game of baseball special for me –  and now for my son.