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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)