An update to yesterday’s item about the Chronicle’s plans to shut down its pressroom and outsource its printing to Montreal-based Transcontinental, which will build a $200 million plant in the Bay Area.
- • New union contract. The Chronicle’s 230 printers, who have been working without a contract since July 1, 2005, plan to vote Sunday on a new contract proposal from management, according to a story in this morning’s Chron. The contract with the the Web Pressmen and Prepress Workers Union Local 4, a unit of the Teamsters, allows for termination of the workers when the Transcon plant opens on May 1, 2009. The agreement provides for severance payments in the amount of two weeks for every year of service up to one year and up to one year of health and welfare contributions, the Chron said. A worker re-training fund and productivity bonuses are also in the new contract.
• 10-15% cost savings. Replacing the Chronicle’s existing press wouldn’t be “cost responsible,” Publisher Frank Vega said. Previous reports have said that the Chronicle in 2005 was losing about $1 million a week, though the losses have been reduced this year. Most U.S. newspapers can save 10 percent to 15 percent on their printing by outsourcing, said newspaper analyst Paul Ginocchio of Deutsche Bank North America, according to a Canadian Press news service story about the Chron deal.
• A new trend. The Chron will be the largest U.S. newspaper to outsource all of its printing, and the switch may start a trend. “I absolutely think it’s a trend,” Ginocchio said. He said the agreement will be the talk of the U.S. newspaper industry over the next six months.
• Who is next? The Merc? What the Chron didn’t say in today’s story, but the Canadian Press noted, is that the Transcon plant will likely have excess capacity to print other newspapers. One analyst, who was not identified by name, said the Transcon deal will work best if 45 percent of the plant is used for non-Hearst business. Transcon CEO Luc Desjardins is quoted as saying that discussions with another “large American publisher” have been underway for 16 months. The Merc’s pressroom is unionized, the other major press operations in the Bay Area are non-union.
• No location yet. The location of the Transcon plant in the Bay Area has not been decided.