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Friday, March 29, 2013

ANOTHER DISASTER, PEARL HARBOR ALL OVER AGAIN

It was December 8th, 45 years and a day after the "Day of Infamy", but thanks to the misguided management team at Cahners (Reed), it became the day of mass dismissals . At about 10:30 a.m., Diane Ruggeri came into my office. "You're new best friend, Bill Platt is on the phone", she informed me. He had not been in contact since the meeting in my office in October. We exchanged pleasantries and then he hit me with a demand I couldn't believe. "Fire 150 people this week," he ordered. I can't remember ever losing my temper in a business situation before, but I couldn't help myself. Two months earlier, he had  told me our circulation and accounting department employees had at least six months to find employment. I was so hot, I shouted "Go f... yourself!" And I slammed down the phone. Seconds later it rang again. I knew who it was, and I answered "yeah". He said he thought we had lost our connection. I was simple and to the point. "If you want to sack 150 people, you come to New York and do it yourself," I replied, this time slamming down the telephone so hard I cracked it. I expected, that when he showed up two days later  for the execution, the number dismissed would probably be 151, and I'd be out too.

For some reason, in spite of my  outburst, he acted as if nothing out of the ordinary had happened. He said not a word to me. I called Tim Burkholder in  Barrington for consolation. He was having his own problems. "Expect to be out of work on April first," I warned him. His response, "Why would they fire the best two publishers in the company?" And I answered, "We're the enemy." From that day on I had no tolerance for the Cahners executives, though I hoped my disrespect would not affect the staff of GAM.

I had not mentioned my problems to any of our customers or readers prior to that day,  but I could no longer contain my feelings. For nearly eight years, because I was always traveling, our family had not taken a holiday together. Now I decided that the whole family, Carol, Michael;, Leslie and I would attend the PIA Presidents Conference in Hawaii in January. It would give me a chance to say goodbye to a number of my friends in the printing industry. We had a great time. In February, Carol and I traveled to  Phoenix, Arizona for NAPL's Top Management Conference, and I alerted attendees to GAM's current shakeup. I guess the word had leaked out. John Favat, publisher of American Printer and Elizabeth Berglund, the editor, approached me to write a monthly column for AP. " I told  them I had to finalize my separation, which I expected to do at the end of March, but that I'd be happy to be one of their contributing editors..

Last, but not least we went back to Tuscon for  the NPES spring meeting. Going to Cleveland Indian Sprigt Training camp had always been on my bucket list. I remember Neil Richards, Kodak's statistical and market expert, organized a trip to Al Lopez Field. We even chatted with my teenage idol, Bob Feller and Neil still has the autographed ball from the Indian's Hall-of-Fame star. Every one of the executives on hand asked me how I was getting along with my new bosses. "They're so fond of me, I expect to get canned when I get back to New York," Most thought I was joking .(Next week: The end of an era and my final column in Graphic Arts Monthly.)

Thursday, March 28, 2013

REASSURING A NERVOUS EMPLOYEE BASE

On the Friday after my first meeting with the Cahners' executives, I called a meeting of the circulation, accounting and promotion departments. It was held on the 10th floor, which could accommodate the 160 people invited. Most were minorities, black, hispanic, and the majority were women. I climbed  on a chair, and hopped onto a desk in the front so everyone could hear me. With no mike, I projected my voice so even the people in the balcony could hear. Of course there was no balcony, but I could see others on the higher floors watching the gathering to get more information on our new owners. It was like  being in a class cage.  I began, "The good news is that you all have approximately nine months to find a new job. If you need a recommendation, let me know. Don't panic. If you're interested in relocating to Denver, let me know. If have any questions, call me or come to my office. I'll do all I can to make the transition less painful." It took less than two minutes to give them the bad news. I noticed a number with tears in their eyes, Only one, the head of the circulation department, Joe Zaccaria, said he would consider relocating. Making that short announcement was one of the most painful experiences in my career.

Later that day Tim Burkholder, who was handling the Barrington, Illinois office integration, phoned to tell me about his meeting. Sounded just like mine. He asked, "Are they nuts? They want all of the magazines to have a 60-40 ratio. I figured that will take a million dollars off the bottom line." I told him their formula publishing would cost New York 50% more. In total they had erased $2.5 million of profit in two short visits. I had lunch with Diane Ruggeri, who had been my assistant for the past 13 years. I tried to reassure her, but  she was too perceptive. "They're going to make Ron Andriani publisher, but I'll be publishing director Just do your job," I advised her. I added, 'Play it cool for a while and let's see what develops."

To tell the truth, I couldn't wait to get back on the road. The jubilant spirit in the office had dissipated.   For the first time in my life, I didn't look forward to going to work. Jim Olsen, who then managed Pacific Printing Industries, a PIA affiliate had  asked me to speak in late October in Portland, Oregon and Seattle, Washington. To get the most value from the trip, I also spoke in San Francisco. I told Jim about the new owners and explained that he would have to cover my expenses. Jack Abely was no longer there to sign my expense reports and I was sure Cahners wouldn't understand the self-promotion. Jim agreed and I made the trip.

What I learned was that business on the West Coast was slumping. The "soft landing" predicted by economist was bumpier than expected. In Portland I encountered a great deal of nervousness among the printers in the  city. It was depressing. And then I arrived in Seattle. The mood was almost ebullient. Not one printer complained about the economy. Virtually everyone said business was growing. Why, I quizzed them. In one voice, they responded "MSFT". Microsoft was Seattle's savior, proving that local markets can be influenced by one large company.

Returning from the trip, I hired a new publisher for Fire Engineering. His name was Henry Dineen, and he had no idea that his employment with Cahners would be so short-lived. After a few weeks on the job, we learned that a deal would spin-off the fire magazine and Solid State Technology, both now profitable, to PennWell Publishing in Tulsa Oklahoma. I didn't get the news from Cahners, but  from an old friend, Phil Lauinger, the president of the buyer. (Today the company is called Lauinger Publishing.) Phil congratulated me on Fire Engineering's turnaround and we reminisced about a week in 1964 when we were tutored by Marshall  Mcluhan,, the media guru of that era.. He was amazed that I had no knowledge of the sale, but it was minor to what I was  told in early December. (That horror story in tomorrow's post)

My lunch today


Wednesday, March 27, 2013

BUTTERED UP, THEN BATTERED DOWN

Several days after we had been sold, the CEO of Cahners (Reed) called to introduce himself and make an appointment to come to my office. At 10 a.m. on Wednesday, October 8, 1986, two  executives showed up in my office, Bill Platt, the CEO, and Terry McDermott,, the president. I showed them into my office, and offered coffee. They declined. They were all business. I had approached this meeting as if it were a chess match. For a couple of days, I had been keeping a check list of the moves I would make if I were in their position. But, when they arrived, I felt much like a homeowner, who had a visit from burglars. assessing the valuables they couldn't wait to get their hands on. I realized immediately that I was "them" and they were "us". If you've ever been acquired, you'll know how I felt.

 I sat them on one of the couches, and pulled up a hard backed chair. I wanted to be sitting on a higher plane than they were. Platt did most of the talking. He had done his homework, and had an accurate read on Graphic Arts Monthly's meteoric growth and Fire Engineering's turnaround. He started by complimenting on the job we had done. He explained that Tim Burkholder would have responsibility for the Barrington, Illinois transition, and I'd oversee the New York operations. Technical Publishing had about 350 people in the Midwest location and we had about 400 employees in New York City. They asked some personal questions, continuing to say nice things about the job I had done. I was trying to read them without success. Platt said, "We see your Publisher's Perspective is the best read page in GAM," McDermott chimed in, "And you're the only publisher who has come from the editorial side."  I nodded my head in agreement, while allowing them to do most of the talking, but I felt the boot ready to kick me in the butt.

 And it did. (To better understand what they were to tell me, readers should know that magazines operate with an advertising/editorial ad ratio, usually 60/40, but every additional percentage point of advertising is worth about $15,000 to the bottom line, depending on the circulation base. As GAM continued to prosper I had brought the ad percentage to 74%) "We want you to make some changes. First, we operate on a strict 60/40 formula company wide and we want you to abide by that." (In my mind I quickly calculated $225,000 erased from the bottom line.) Secondly we want you to stop those "begging letters". (That was another $125,000 wiped out on GAM alone and more than $600,000 company-wide,) I could believe what I was hearing. Within minutes they had lopped 15% off of our bottom line.

Then came the telling blow. Because Jim Morris, publisher of Datamation, the largest magazine in our family, was one of the consortium, he had been severed, and that book was without a publisher. "We'd like to you replace him," they advised me, They asked about Ron Andriani. "He's a great salesman, but he's not a publisher," I replied honestly. "We have to make do," they answered in unison. You'll be publishing director of the three magazines, including Fire Engineering." There was not much more to say, but on my check list I had two questions that needed answers. The first involved contracts for 1987. Platt told me the current agreements would be extended to March 31, the end of Cahners' fiscal year. (The first thought in my mind was that March 31st would be my last day. (How appropriate I thought.The next day was April Fool's Day.) My final question was the most important. "I know you have your circulation department in Denver and accounting Newton, Mass. What do I tell the 160 people in those departments about their future?" Without blinking an eye lash, Platt replied, You can tell them we are going through a reorganization, and won't make decisions for six to nine months, maybe a year.. But, if they are interested in relocating to Denver or Newton, they should let you know."

It sounded reasonable to me. But, you guessed it. They were lying through their teeth. By the end of the year, I knew exactly where I would be on April 1,..out in the cold (The best part of this story in tomorrow's post. I when I tell Platt  he should do something Clint Eastwood had noted in his "chair speech" at the Republican Convention, was a physical impossibility.

Wake up, it's a beautiful day ♥






The pictures above are from Monday

Yesterday was such an amazing day!
I met my too lovely friends, Noa and Tal, and we decided to watch The Perks of Being a Wallflower.
Have you heard about this movie? I can honestly say it left me speechless! AMAZING ♥
I can't wait to read the book!

In the evening Tal, Inbar and I took the bus to the beach. It was really cold but still fun as always when it comes to us (:

How was your Tuesday?

Tuesday, March 26, 2013

WHERE DO I GO FROM HERE?-EXPLORING OPTIONS

It certainly wasn't the  best of Times. The rumors were rampant. Though most knew something was going on, we tried to operate as normal. In the midst of the turmoil and uncertainty, key people were leaving. My phone was ringing off the hook. One call from Joe Webb, Chemco's marketing manager posed an interesting opportunity. Joe, studying at NYU, was looking from someone to underwrite the research for his doctoral thesis on marketing in the printing industry. He needed $1500 and since he had recently doubled his ad pages in GAM, how could I refuse. There was one hook. When it was completed, I wanted him to put it in lay language and submit it in two parts for a special feature in GAM. I could then charge it to the editorial budget, and at the same time, solidify our campaign and strengthen our focus on marketing, a win-win situation..

A couple of days later, Ron Andriani came into my office with annother proposal, to acquire the regional printing publications. I wan't sure if he had heard the rumor or was just floating a dumb idea. I played it as dumb idea. I asked, "Why would you want to siphon of ad dollars from the mother ship and compete against yourself?" He shrugged his shoulder at the rejection. But it wasn't a bad idea if you weren't connected with Graphic Arts Monthly, and my gut told me that when the sale was finalized,  I'd be out. Leo Joachim had launched Printing News East in 1928. When he passed away in 1985, his wife Florence, who still loved him dearly, continued the publish the weekly news publication. She was about 78, but tiny and frail. I called her and visited the PNE office which looked like it had in the 1940's. I asked if she would be interested in selling since Leo had been gone a year. She surprised me by saying she no longer owned it, and that Playbill, the theater handout had purchased it. I called the owner whose name was Brill. He explained he and Leo were good friends and had promised Leo, that when he passed, Brill would buy the publication to protect Florence. "It's my fiduciary duty to Leo to keep Printing News in the family," he explained. (The end of this story will come next week.)

So much for making an acquisition.. But the next day another opportunity A phone call from PIA Chairman Bob Houk informed me that Rod Borum was leaving (translation, fired) and he and Bob Jocham, my travel companion in Italy in 1983,  thought I'd be a good candidate to replace him. I asked Bob to send me the prospectus and the job description. A week later I received a large envelope with "CONFIDENTIAL" written in red ink. I opened it and started laughing. The first paragraph contained a physical description of the perfect candidate."Tall, slim, full head of hair, white (the word Christian was not included, but implied.) I called Bob Houk and asked if he had read it. "No", he answered.  "Bob, you know there is nothing in this about business acumen, intelligence or knowledge of the industry. And we are friends. You know I'm short, fat, bald and Jewish. I wouldn't get by the first interview. They wanted a robot who won't disturb the board," I told him. Ray Roper, who took over the job in 1987 was just what they were looking for.

Ironically I was in Arlington Virginia at PIA for the 1986  Marketing Excellence Awards, when I learned that  the deal had been done. It was late September. Jack Abely called as I was making myself presentable for the presentation. It was about 7 p.m. and I was in my jockey shorts when the phone rang. I sat on the bed, picked up the phone and heard Jack's voice on the other end. "The deal has been finalized. We've been sold to Cahners (Reed) for $161 million. The six of us still in the consortium have been axed. You and Tim (Burkholder) will oversee the transition, They (he didn't say who) will be in your office next week to discuss the change in management" he told me in resigned, staccato tones. I thanked him for the information and we both disconnected simultaneously.

My mind was whirring with the information. Cahners had paid 33% more than I had valued our company. Was I wrong, or were they idiots? Of course, they had no debt service to worry about, with a several billion dollar entity backing them. But there was no way this acquisition would work. I went to the presentation, and, by the way, Dennis Castiglione of Carpenter Reserve repeated his 1983 victory with another outstanding marketing program. (In tomorrow's blog the new bosses show up in my office.)

Meet my new baby



New perfume - Viva La Juicy