Goss Shutters Last U.S. Plant

By: Mark Fitzgerald Goss Graphic Systems -- a company that began with Fred Goss and his brother Sam tinkering in Chicago with a two-color press unit and went on to become the most visible symbol of America's printing-press-manufacturing prowess -- will now make all its newspaper presses in France, England, Japan, and China.

With the shuttering of its last U.S. plant in Cedar Rapids, the company that once sent presses across the world from shop floors in Illinois, Pennsylvania, and Iowa will rely on its foreign manufacturing sites to supply new presses and replacement parts to U.S. newspapers. About 370 workers were dismissed without severance payments in the Aug. 31 plant closure. Another 90 employees, or about 20% of the staff, were fired at Goss' headquarters in the Chicago suburb of Westmont, Ill. Both sites had been hit by previous layoffs this year.

The closure left some newspapers anxious about the status of new or replacement equipment already on order. The New York Post, for instance, last week sent a production employee to Cedar Rapids to check on parts needed to complete the only one of its four new Postliner color offset presses that is not yet up and running. "I don't know how this event complicates the issue," Production Director David O'Neill said. As to the closing itself, he added: "It was a bit of a surprise when we found out Cedar Rapids was closing -- and then it was not totally surprising, either."

Goss insisted the developments did not change its ability to serve customers who have made the Community and Urbanite model printing presses among the most ubiquitous in the world. "We are fully able to satisfy any and all single-width or double-width customer demand in the Americas or in the international markets from our existing product ranges," Goss President Richard Sutis wrote in an e-mail message sent in response to written questions from E&P. As for new orders, he added: "We already manufacture Community [presses] in Shanghai, China, and a version of the Urbanite [press] in Sayama, Japan. Press expansions and all new press orders would be sourced from these 'international' manufacturing locations. [Existing] Urbanite [presses] can also be expanded by shaftless Universal towers as an alternative."

Observers inside and out of Goss, however, are telling the story of a company that is just two years out of bankruptcy reorganization and being squeezed by its bank lenders. "They've stopped the cash hemorrhaging, cut overhead, and they're hoping to limp along," said one former executive. Goss managers in Westmont, the executive said, are "speculating that the doors will close. Soon. Like as soon as Monday [Sept. 10]."

As of last week, Goss had not yet submitted its 10Q for the second quarter to the U.S. Securities and Exchange Commission, leading other outside observers to speculate that it may be in default of covenants with its lenders, but Goss' Sutis said the absent filing "does not suggest anything in particular at all."

"We are not out of the single-width market, and neither are we out of the double-width market worldwide or in the Americas," Sutis said.

Some newspaper observers say Goss may be positioning itself in the United States as a sales-and-service company with manufacturing abroad, in the manner of such press makers as MAN Roland, TKS (USA), and Wifag. Goss itself noted that it has racked up substantial sales abroad even as it has been unable to write large orders in the United States.

Goss said the "seminal event" in the closing of Cedar Rapids was "unfair dumping of press equipment in the United States by foreign manufacturers."

Ironically, the closing of the Cedar Rapids plant leaves Heidelberg Web Systems, the Dover, N.H.-based unit of a German firm, as the only big full-line company manufacturing newspaper printing presses in the United States.

Goss' immediate problem, some former employees said, is that suppliers are not being paid. By August, one former Cedar Rapids manager said, so many suppliers were refusing to extend credit that purchasing employees had to order from out-of-state companies, "far enough away that the rumors had not reached there." Sutis wrote this in answer to a question about whether suppliers were being paid: "Goss always takes its responsibilities to its vendors seriously."