Quad Graphics cutting $100 million in costs, closing plants in Georgia, Pennsylvania
Quad Graphics announced a $100 million cost reduction plan this week, on the heels of a tough third quarter. The company says it missed expectations because of a greater-than-expected pullback in volumes across the industry during the quarter. They also cited pricing pressures, and higher manufacturing costs associated with lower productivity.
As part of the cost reduction plan, the company will close plants in Augusta, GA, and East Greenville, PA by the end of the year. They say it has nothing to do with employee performance.
This won't affect workers in Wisconsin. Although some workers at the closing facilities could transfer to other plants in the US.
Quad Graphics Director of Corporate Communications Claire Ho released a statement to CBS 58 saying:
"In September, we announced Quad/Graphics would be strengthening our commitment to our home state of Wisconsin with plans to add 500 more jobs. These are full-time, full-benefit positions with career advancement opportunities.
We are hiring because we are adding work to our Wisconsin network of plants as we continue to manage our overall platform, migrating work from closing facilities to where we can manufacture and distribute it most efficiently. Our Wisconsin platform, which consists of 14 major manufacturing, distribution and related facilities, is among the most efficient platforms in the entire printing industry.
We would like to retain the skills and knowledge of employees who are in closing facilities. Therefore, we are offering them the opportunity to transfer to other plants, including Wisconsin."
Marquette University Economics professor Abdur Chowdhury says Quad Graphics is in a tough spot.
"Companies like Quad Graphics depend on paper products, printing," Chowdhury said. "Because of the internet, digital age, you will see sort of a declining trend in the demand. You'll see this continuing in the future. They may have to cut back more."
He says while it may not affect workers in Wisconsin right now, it should be a wake-up call to some.
"I may want to retrain myself, maybe look at the digital area or look at other areas just keep myself marketable," Chowdhury said. "I think that's something workers may want to keep in mind. It's a changing world so they may have to adapt to this change by taking up new skills or changing their current skill and being more marketable."