Local Printing Company Closure Causes Ripple Effect On Community

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Local Printing Company Closure Causes Ripple Effect On Community

Area could lose $24 million in income as print shop closes
St. Cloud printing company closure to result in $24 million loss of income, jobs in area.
By Kevin Allenspach,

The closure of Quad/Graphics, which will come in the next couple of weeks and put 280 people out of work, is expected to have a ripple effect that will result in the total loss of 475 jobs that will double the amount of job losses.

The loss of those jobs equates to almost $73 million in sales and more than $24 million in labor income annually in Benton and Stearns counties.

Those are the findings of an economic emergency report jointly prepared by University of Minnesota Extension and the St. Cloud State University School of Public Affairs Research.

The information was presented Friday at St. Cloud Public Library in a discussion sponsored by the Greater St. Cloud Development Corp.

Business sectors that are expected to be most affected by Quad/Graphics' decision to close its St. Cloud printing facility will be food service and drinking places, wholesale trade, real estate establishments and private hospitals.

"I think you can look at businesses like this in our community as a resource, almost like wetlands, in that the goal is always to preserve," GSDC President Patti Gartland told a group of about 30 people. "The first thing you want to do where wetlands are concerned is to avoid any impact on them. Could this have been avoided? … If it couldn't be avoided, the next step is to try and minimize the damage and gauge what the ripple effect will be so we can respond where we can and be more prepared in the event it happens again."

Quad/Graphics was not asked to furnish data for the report. Two representatives of the company attended Friday's meeting but declined to discuss the impact of the closure publicly.

The company on June 18 told its St. Cloud employees that the plant would cease commercial printing by late August. Layoffs are expected to begin around Aug. 18 and continue for up to two weeks until production ceases. Not since Fingerhut laid off 1,200 people in 2002 have as many employees been affected by one Central Minnesota business decision.

Several of the presenters, which included King Banaian, interim dean of the School of Public Affairs at St. Cloud State, and Brigid Tuck, senior economic impact analyst with the University of Minnesota, drew parallels between the Quad/Graphics closure and the closing of the Verso Paper mill two years ago in Sartell.

The demise of the Verso mill, the result of a Memorial Day explosion and fire that killed one person and injured four others, led to the displacement of about 260 workers. There also had been a layoff of 175 workers six months before the explosion, for a total loss of about 435 Verso jobs. In the months after the explosion, St. Cloud State economists estimated a total of 680 jobs in the area would feel the effects of a closure.

While the economic impact of the Quad/Graphics decision appears large, presenters stressed that the displaced workers will enter an economy that has been growing rapidly. Area employment has grown at 2.8 percent in the past year, and unemployment is below 5 percent.

"The challenge is to employ these people as fast as we can. And if we help the ones start businesses who want to do so, those efforts might provide more jobs," said Brian Myres, a retired executive with Capital One 360 in St. Cloud who has led GSDC marketing efforts.

"What's the saying? You don't want to waste a disaster?" he asked. "When Fingerhut had its layoff, that was a godsend for me at Capital One — which was then ING Direct. I was looking for IT people and all other kinds of needs and those people came available. Out of the ashes, good things can rise."

According to data supplied by Kathy Zavala of the Stearns-Benton Employment & Training Center, 57 Quad/Graphics employees have been with the company for 30 or more years. Another 43 have service of at least 25 years, 32 worked there at least 15 years and 26 have been employed for at least a decade.

Twenty-six percent of the workforce earned between $11.50 and $14.49 per hour. Twenty-three percent earned between $14.50 and $18.25 per hour, and another 25 percent were paid $18.26 to $22.74 per hour.

Zavala said her agency soon hopes to win a state grant that would provide funding to assist 150 people in retraining and job searches.

"These are people who want to work and learn and stay in the area," Zavala said. "Locally, the company has been very proactive. They had a job fair and we're trying to connect them with all the services we can."

Printing represented 1.3 percent of area employment or about 1,400 jobs as of 2013. That was down from 2.3 percent or 2,200 jobs in 2009.

Printing revenue in the U.S. is expected to decline by 5 percent annually through 2018, according to an IBISWorld industry report.

Local Printing Company Closure Causes Ripple Effect On Community

Area could lose $24 million in income as print shop closes
St. Cloud printing company closure to result in $24 million loss of income, jobs in area.
By Kevin Allenspach,

The closure of Quad/Graphics, which will come in the next couple of weeks and put 280 people out of work, is expected to have a ripple effect that will result in the total loss of 475 jobs that will double the amount of job losses.

The loss of those jobs equates to almost $73 million in sales and more than $24 million in labor income annually in Benton and Stearns counties.

Those are the findings of an economic emergency report jointly prepared by University of Minnesota Extension and the St. Cloud State University School of Public Affairs Research.

The information was presented Friday at St. Cloud Public Library in a discussion sponsored by the Greater St. Cloud Development Corp.

Business sectors that are expected to be most affected by Quad/Graphics' decision to close its St. Cloud printing facility will be food service and drinking places, wholesale trade, real estate establishments and private hospitals.

"I think you can look at businesses like this in our community as a resource, almost like wetlands, in that the goal is always to preserve," GSDC President Patti Gartland told a group of about 30 people. "The first thing you want to do where wetlands are concerned is to avoid any impact on them. Could this have been avoided? … If it couldn't be avoided, the next step is to try and minimize the damage and gauge what the ripple effect will be so we can respond where we can and be more prepared in the event it happens again."

Quad/Graphics was not asked to furnish data for the report. Two representatives of the company attended Friday's meeting but declined to discuss the impact of the closure publicly.

The company on June 18 told its St. Cloud employees that the plant would cease commercial printing by late August. Layoffs are expected to begin around Aug. 18 and continue for up to two weeks until production ceases. Not since Fingerhut laid off 1,200 people in 2002 have as many employees been affected by one Central Minnesota business decision.

Several of the presenters, which included King Banaian, interim dean of the School of Public Affairs at St. Cloud State, and Brigid Tuck, senior economic impact analyst with the University of Minnesota, drew parallels between the Quad/Graphics closure and the closing of the Verso Paper mill two years ago in Sartell.

The demise of the Verso mill, the result of a Memorial Day explosion and fire that killed one person and injured four others, led to the displacement of about 260 workers. There also had been a layoff of 175 workers six months before the explosion, for a total loss of about 435 Verso jobs. In the months after the explosion, St. Cloud State economists estimated a total of 680 jobs in the area would feel the effects of a closure.

While the economic impact of the Quad/Graphics decision appears large, presenters stressed that the displaced workers will enter an economy that has been growing rapidly. Area employment has grown at 2.8 percent in the past year, and unemployment is below 5 percent.

"The challenge is to employ these people as fast as we can. And if we help the ones start businesses who want to do so, those efforts might provide more jobs," said Brian Myres, a retired executive with Capital One 360 in St. Cloud who has led GSDC marketing efforts.

"What's the saying? You don't want to waste a disaster?" he asked. "When Fingerhut had its layoff, that was a godsend for me at Capital One — which was then ING Direct. I was looking for IT people and all other kinds of needs and those people came available. Out of the ashes, good things can rise."

According to data supplied by Kathy Zavala of the Stearns-Benton Employment & Training Center, 57 Quad/Graphics employees have been with the company for 30 or more years. Another 43 have service of at least 25 years, 32 worked there at least 15 years and 26 have been employed for at least a decade.

Twenty-six percent of the workforce earned between $11.50 and $14.49 per hour. Twenty-three percent earned between $14.50 and $18.25 per hour, and another 25 percent were paid $18.26 to $22.74 per hour.

Zavala said her agency soon hopes to win a state grant that would provide funding to assist 150 people in retraining and job searches.

"These are people who want to work and learn and stay in the area," Zavala said. "Locally, the company has been very proactive. They had a job fair and we're trying to connect them with all the services we can."

Printing represented 1.3 percent of area employment or about 1,400 jobs as of 2013. That was down from 2.3 percent or 2,200 jobs in 2009.

Printing revenue in the U.S. is expected to decline by 5 percent annually through 2018, according to an IBISWorld industry report.

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August 3, 2014 at 11:14 AM