Book Biz: Pseudonyms, Security Typewriters, 20 Years of Chicken Soup

In the business world observers and pundits frequently struggle to make sense of corporate mergers. Acquisitions are generally fairly easy to understand; one company has technology, clients, facilities or profits that a larger company acquires rather than tries to emulate.

But in the Detroit area we learned years ago that there is no such thing as a merger of equals, famously declared by Mercedes Benz when it “merged” with Chrysler. It can all get so confusing that sometimes even the negotiators aren’t sure what’s happening, such as when the Stroh’s Beer company thought they were buying or maybe merging with Milwaukee’s Schlitz Beer only to find out that Schlitz was the “more equal” of the two after the deal was done.

Last year when Ann Arbor’s two largest book manufacturers merged, a lot of industry observers were scratching their heads trying to figure out how the merger made sense and who was the “more equal”.

Today in the book industry, growth is the goal but stability is the key fallback position. The combined sales of Edwards Brothers and Malloy Litho isn’t in a growth cycle. Edwards Brothers Malloy reported 2012 sales of $115 million compared to a pre-merger sales total of $125 million in 2008.

One of the unique features about the merger was each company had invested heavily in Timson Book Presses, to the point that the merged company had more of them than any one other company anywhere in the world.

And while these presses don’t come cheap, they are fire breathing monsters devouring a ton of paper in minutes and spitting out baled signatures ready for binding. It was said they could be profitable printing as few as 300 copies, but that was before 300 copies could be produced cheaply using digital equipment. Realistically, the longer the run the better, because once these presses are wide open the crew is busy keeping a roll of paper in front of it and the signatures flowing to the bindery at the delivery end.EB Office - State Street

But those great long runs get scarcer every year. Edwards Brothers once produced Harry Potter books as one of many manufacturers who each got an order for Harry’s production. Today, Edwards Brothers Malloy easily have the capacity to do all of the printing for each volume by itself. Trouble is, no one is asking them to.

So the announcement on July 31 that the newly merged company had decided that the Edwards Brothers company headquarters on State Street in Ann Arbor would be sold and the business consolidated into Malloy Litho’s headquarters on Jackson Road shouldn’t have come as a surprise, but it did.

As John Edwards, CEO of the merged companies says,, “But like most book printers, we’ve seen a decline in longer run offset business. At the same time, our digital operation is growing at a 20 percent clip .”

I think the two take-aways from this are: number one, all that press power has produced over-capacity in long runs for the new company and number two, digital printing is less expensive with commensurately lower margins.

The impact of this consolidation is far reaching with many unanswered questions lingering for further explanation. What’s known is that the State Street facility has somewhere around 350 – 400 employees in a 185,000 square foot building situated on 16 acres.

Malloy’s Jackson Road plant hosts around 250 employees in a similar 180,000 square foot facility, but here’s the surprising difference. Over the years Malloy Litho has expanded, expanded, and expanded it’s factory. An old picture in their lobby shows an aerial view taken years ago of the plant after just an addition or two had been added. Now, nearly any Malloy employee could point to the vacant land in the picture and describe which part of the modern plant it became. And that’s the problem; they’ve used up all of that land. If another expansion was in the works they’d have to either plow-up the parking lot, figure out how to add a second and third story to most of the buildings or purchase some very expensive land adjoining their current plot.

So I don’t think that an expansion of the physical plant is in the long term outlook.

The usual thing to say is that the company will try to retain as many employees as possible, but that’s not really keeping with the spirit of downsizing is it? Edwards Brothers opened a smaller book manufacturing plant in North Carolina some years ago and had a semi-truck shuttling work back and forth from Ann Arbor every day. Perhaps some skill employees can relocate to the Lillington plant.

But even if Ann Arbor remains the short-run book manufacturing capitol of the world, there’s no way the remaining four companies can absorb 300+ employees in the near future. There may be 300+ openings for people with book manufacturing experience in the entire country at the moment, but I doubt it.

Edwards Brothers began in Ann Arbor 120 years ago, mimeographing copies of law lectures for use at the University of Michigan School of Law. Malloy Litho was established on Jackson Road in 1960 by Jim Malloy.

Obama Likes Amazon?

 President Obama visited an Amazon warehouse calling it a fine example of an American success story. Are there any other companies that worked as zealously to avoid paying taxes? Attorney General Eric Holder even filed suit against Amazon’s perceived competitors. I don’t get it.

 Amazon Not Predatory?

 While Apple appeals the judgement that found it guilty of manipulating ebook pricing, the notion that Apple and its allies were simply fending off the monopolistic game plan of Amazon is debunked.

 Finns Want Looser Copyright Laws

 Suggestions to loosen some copyright laws (downloading an MP3 illegally would become a misdemeanor) were collected and edited via crowdsourcing and presented to the Finnish Parliament. The purported reason for crowdsourcing the proposal was to counterbalance the the power of lobbyists.

 Karl PohrtKarl_pohrt_shaman_drum-thumb-400x268-147035

 The Shaman Drum bookstore was miniscule when compared to the two big chains that came to control book retailing a decade ago, but its impact far exceeded its size. Owner Karl Pohrt, who passed away July 10, was first a reader, but championed independent bookstores, downtown Ann Arbor’s commercial revival, publishing, and the Great Lakes Literary Arts Center which he founded.

 Books As Art

 Books are appearing as a popular new medium for artistic creation. The works are ingenious (although the use of the word “fetishists” is a reach), practical and worthy of museum display.

 Why You Need A Pseudonym

 (and How to Create One)

 Now that we know J.K.Rowling has published a novel of some import using a pseudonym, it’s time to not only discuss the reasons for writing under a pseudonym, but also the ins and outs of choosing one.

 South Korea’s Grub Street?

 An entire city devoted to book and magazine publishing and printing? Sounds a bit like 18th century Grub Street. And I thought Ann Arbor was Book City!

Avoiding Digital Headachesold typewriter

 

Are you tired of “spam” in your Inbox? Do you forget your passwords, or worse, fear that someone else could use them? Do you hate that even your own computer tracks your every move, let alone what the NSA may follow? Fear not. The Russian secret service’s (FGA) solution is to abandon computers for typewriters after watching the havoc Edward Snowden has caused in US security circles. Next, a boom in shredders?

 Books to Make You Smart?

 Djanice asked for followers on Reddit to share the title of a book that “made them smarter”. The format is not a simple, straight forward list but suggestions with comments following. Links to read free samples of many of the titles are here.

 Why is a “Blurb” a “Blurb”?blurb

 For some reason I assumed the word “blurb” was an acronym, but for what? It actually began with a fictitious woman named Belinda Blurb in 1907.

 Not Dead Yet Awards

 Last year print-centric blog DeadTreeEdition asked its readers to name four print related companies most likely to go out of business in 2012. While some have written obits on file, all four continue to exist.

 Twenty Years of Chicken Soup

 Chicken Soup for the Soul debuted twenty years ago and has gone on to sell over 112 million copies in North America, not to mention being translated into forty languages, and spinning off an additional 250 titles. It also produces or licenses CDs, DVDs, pet food, greeting cards, and flowers. What a brand!

 Fonts for Scientists (Not Scientific Fonts)

 If scientists had tried to “brand” themselves over the centuries, what would their brand logo look like?Look here.

 Final Thought

 We have no Academy, thank Heaven, to tell what is real English and what isn’t. Our Grand Jury is that ubiquitous person, Usage, and we keep him pretty busy at his job.                                                                                                        Gelett Burgess

 

 

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I've worked in book manufacturing for over 30 years, closing my company Baker Johnson, Inc. in 2005. Currently I work freelance with a large group of publishers, advising them on the printing options available to them as the book industry endures major restructuring.
My wife Cathy is a retired psychologist and spent most of her career working with the youth at Maxey Boys Training School. She is a small mammal rehabilitator with Friends of Wildlife.
Our daughter Whitney is a PharmD working in the Denver area evaluating the pharmaceutical requirements of nursing homes. Our son Eliot lives in Waterloo and is an editor at Mathematical Reviews in Ann Arbor.