The Demise of The Printing Industry Has Been Greatly Exaggerated

Michael Spiel Addresses The American Dealers Group

I haven’t written a blog for some time now. The malaise that ran through our industry was completely obliterated by a new found optimism and a need to automate. This has kept me quite busy.

As my brother recently said in a speech to the American Dealers Group; “We are coming off the busiest summer that our company has seen in years. Surprised? We certainly were. It seems that America has finally woken up to the fact that we need to reduce our labor to be competitive. Printers are automating more than ever before. Our smart customers are automating. Those less savvy are holding auctions.” It’s been three years since the 2008 crash. It’s time to go high or go home. Either you are going to compete in this new economy or you’re going to fold. “That’s the way we’ve always done it” is no longer an option.

This was the busiest Graph Expo we’ve seen in years. Americans are finally coming around to the notion that you can’t solve every problem with labor. The Europeans have known this for years and we are starting to catch up. We have more large shops looking at automatic double wire binders than ever before. More small shops are automating their punching and coil binding.

So look around your shop. Where are the bottlenecks? Where are your workers doing more talking than binding? How can you reduce labor with a decent ROI? If you don’t look at these things, and look at them soon, you may start looking at auctioneers.

Airport Security Is A Joke

Airport security is a joke.

I don’t know whether or not our airport security is meant to be a jobs program, theater of the absurd, or an all out attempt to bamboozle us into a false sense of security. Has anyone of those security screeners ever caught anyone once? And why do we bother? There is a one in twenty-five million chance of being killed on an airplane while there is only one in a half million chance of being struck by lightning.

Firstly we are a nation of cowards. The terrorists have changed the way we travel and continue to do so. The airlines have stopped handing out blankets due to the “Underwear Bomber.” I am sure that the airlines love this. If the FAA mandated that each passenger would have to get a blanket then the airlines would balk. Apparently terrorists will be unable to bring their own blankets to douse with explosive chemicals. Or use their clothes. We take off our shoes before screening so the “would be” Christmas Bomber strapped the juice to his leg. Perhaps the next step is we will all have to strip prior to boarding.

Recently, a retired special education teacher on his way to a wedding in Orlando, Fla., said that he was left humiliated, crying and covered with his own urine after an enhanced pat-down by TSA officers recently at Detroit Metropolitan Airport. Sawyer is a bladder cancer survivor who now wears a urostomy bag, which collects his urine from a stoma, or opening in his abdomen. “I have to wear special clothes and in order to mount the bag I have to seal a wafer to my stomach and then attach the bag. If the seal is broken, urine can leak all over my body and clothes.” “Evidently the scanner picked up on my urostomy bag, because I was chosen for a pat-down procedure.”

Have the terrorists won? You betcha.

Why does this country always opt for the most expensive way to solve a problem? Yes, costlier explosive detectors would be preferable to what we have now but it still won't solve the problem completely. If we trained security personnel to interview travelers prior to boarding it would cost next to nothing and be more valuable than any new technology.

When I flew to Israel, my family and I were interviewed by an Israeli in her early twenties. Since she interviewed us while we were waiting to check our bags it did not slow us down at all. It's time we learned from a country that has to worry about security a lot more than we do.

The Graph Expo show was unexpectedly busy. Almost all of the exhibitors I spoke to were thrilled with the turnout. While some exhibitors were not present, it did not keep back those interested in growing their business. Perhaps business owners are more investment savvy than those who lead us in government. Many decision makers came to Chicago to invest in the future of their business. If only our leaders would do the same. Those who do not invest in the future are doomed to wallow in stagnation and may, soon, find themselves out of business. Let us not forget that this year 100% of your capital equipment can be written off. See my previous blog on this subject.

I know that many of you do not attend trade shows. There was a time that you could visit a show locally but that time has passed. National shows like Graph Expo, On Demand, and Graphics of the Americas are important shows because without them, where would you shop? If shows like these go the way of regional shows it will mean that you will have to fly to each and every distributor or manufacturer that does not have a local dealer. Nor do they sponsor lectures and workshops to assist you in keeping up with today’s market.

So the next time a trade show comes around, think about going. The expense is nominal and a good education is worth the money.

Automate or Stagnate

I was speaking with an owner of a bindery on the west coast who I have been in contact with for about fifteen years. Naturally he cried in his beer about how lousy business was, who hasn’t?

This bindery specializes in plastic coil binding and when the conversation turned towards equipment, he told me that he was standing pat. When I asked about automation he told me that he preferred to stick with his twenty table top coil inserters. Let us not forget that these twenty coilers must be operated by 20 people. I asked him how he could compete when commercial, and even on demand printers were purchasing automatic coil binders. He told me that he hasn’t seen a drop off of business do to that. Really?

Ten years ago this very same bindery owner told me that he bound 1,000,000 books per year in plastic coil. Perhaps he was exaggerating but this time he told me that he was binding about 100,000 books per year.

Back then I tried to convince him to make his own coil. He was buying his coil locally from a manufacturer that used our machine to make his coil. They were making money doing it, why couldn’t he? I told him that he could save a minimum of $100,000 per year making his own coil by purchasing a machine that, at the time, cost only $28,000. He said that he wasn’t interested in making his own coil.

This reminded me of another bindery owner, again on the west coast, who I told would save $100,000 per year and the machine at that time only cost $28,000. His reply to me was; “I’m not so much interested in saving money as making money.” This bindery does little to no plastic coil at all any more.

Cutting costs is more important now than ever. This year, 100% of your capital equipment can be written off, so it makes the pain of equipment purchases a little easier to take. Is it difficult to invest in automation during tough times? Absolutely. Is it worth staving off a 90% drop in business? Absolutely.

What Do You Do With A Drunken Sailor?

Nineteen months ago President Obama was inaugurated. At this very moment leaders of the Republican party began to voice their concerns about the deficit.

We didn’t start spending money like a drunken sailor yesterday. We began ten years ago with the Bush tax cuts, passed through reconciliation. Now Obama wants to let the tax cuts for the richest 1% of the country expire and keep the tax cuts for the lower and middle classes. Is this unreasonable? Where else is the money to reduce the deficit going to come from?

Every economist agrees that if the tax cuts are allowed to expire that the budget deficit will be reduced by about 30%, 680 billion dollars over the next ten years. Otherwise, nearly all of this would go to those making more than $500,000 per year.

Is there anything we have on the table that could reduce the deficit so much? Their argument is that tax cuts is a bad idea given the state of our economy. Will the top 1% of the earning populace rush out to Walmart and Target if the tax cuts are extended or pocket the cash and put it in the bank?

Many so-called fiscal conservatives complained about the auto bail out. This is one of the most successful government programs since the New Deal. Detroit is back in business again. Many complained about the bank bailout but most of the money that the government laid out has been repaid.

When will the fiscal conservatives put their money where their mouth is? Allowing the tax cuts to expire will only raise the tax rate about 3% on the richest Americans, a rate that is identical to that during the Clinton years and lower than the rate during the Reagan years.

I may not be an economist but this is the biggest bang for the buck, deficit reduction wise, while causing the least amount of pain to those who can afford it the most.

Everything Old is New Again

So I am just back from Europe. A two week vacation got cut short when, at a fine Belgium Restaurant, a waiter dropped a croissant on my knee, shattering my meniscus cartilage. Actually, I tripped on a cobble stone curb. Why can’t they just pave their streets flat with cheap asphalt like we do here?

As women know, beauty takes effort. During my week long trip to Belgium I didn’t see any garbage, any homeless people, and the highways were beautiful stretches of road unpolluted by unsightly billboards. Okay, gas was twice the price but I’ll get back to that later. Everything was modern, even in a medieval city like Brugge. I remember traveling to Europe in the late seventies and having to make sure that I had toilet paper in my pocket should the need to use some occur. No more. Now Europe’s urban areas are more modern, cleaner, and human friendly than our cities, not to mention more beautiful.

How do they do it? As I flew out of Brussels I peered down and saw a nuclear power plant. I then thought about the fact that Denmark has become 100% energy independent (see http://www.neatorama.com/2008/01/01/energy-independence-how-denmark-kicked-the-foreign-oil-habit/). They taxed gasoline and automobiles starting in the mid-seventies and used that money to modernize their energy companies and to make their businesses and homes more energy efficient.

What did we do? We gutted the clean air act, put into place by that king of liberals: Richard Nixon. The clean air act was put in place so that when power plants modernized, they had to meet certain standards. That coupled with a lack of energy legislation ensures less efficient production of electricity. It also ensures a greater reliance on coal.

I don’t mind spending a little more for food if it’s better food. I don’t mind paying more taxes if they go to the right programs. When are we going to wake up and spend more money on our quality of life and less money on oil subsidies? When will we realize that we cannot depend on the combustion engine the way we have for the past 100 years? When will we cease rebuilding Iraq and Afghanistan and start rebuilding the US?

The time may come when I visit China again and find that their cities are more modern than ours. They are on their way. Unfortunately so are we. I hope the cheap gas was worth it.

IMPERFECT PITCH

Some time ago I sold a Coilmaster Jr. to a small printer in the south. This is our automatic, table top, coil inserter. I had been working with this client for over a year. She has an unusual business. She sells books that are printed in the US and punched in Korea (At first she told me China, which she may have thought Korea was a part of). She needs to bind tens of thousands of books per year and is loathe to send them out.

When she got a serious about placing an order I had her send me a sample of the book she was binding. It was a fairly straightforward job. It was a thin book, 12mm, with an oval hole. I told her that all was fine and I sold her the machine. The only thing that was unusual was that the book was punched at .248 pitch with an oval hole. I remarked that I had never seen that before. I sent her the article I had just written for American Printer: “Perfect Pitch,” which you can read here: http://americanprinter.com/binding-finishing/printing_perfect_pitch/index.html I also sent her a couple of articles about punching for coil.

I sent my technician there who said that there was some problem with the punching. I called the customer upon completion of the installation and she told me that everything was fine and that she was happy with the machine.

A couple of weeks later I called her to follow up. She told me that she was having problems. Her operator stated that the coil entered the book but stopped halfway through as it was spinning in. I remarked that this sounded like a pitch problem. Running coil with a wrong pitch has a cumulative error effect. Then she told me something that she should have told me right from the get go: She was punching inserts here in America that had to be put into the book. The book she originally sent me had no such inserts. I told her to send me a couple of these sheets along with some of the sheets punched in Korea.

I was flabbergasted. The sheets punched here had a different pitch: .2475. Now that doesn’t sound like much of a difference but get this: The margins were different. The distance between the first hole and the head of the sheet were different. That’s not all: The distance between the spine and the row of holes were different. So, she was fighting sheets punched with a different pitch, a different margin, and a different spine to hole distance.

She then asked the bindery who was punching her job if they could match the hole pattern that was being punched in Korea. They said no. They also told her that there was no such thing as a .248 pitch.

What is a body to do? How much preparation can a salesman offer a prospective client? I would like to hear your comments. If you are interested in receiving any of the articles I had sent this customer, please e-mail me.