Goss Wins Suit; Will It Buy Heidelberg?

By: Jim Rosenberg A jury handed Goss International a multimillion-dollar award last Wednesday in its lawsuit against Japan's Tokyo Kikai Seisakusho, one week after Goss' interest in Heidelberger Druckmaschinen's web press business was again spotlighted by the German printing equipment giant's announced plans to divest its Web Systems unit.

And on Nov. 17, the same day Goss' federal-court suit went to trial, Canadian press lord Conrad Black agreed to step down as chief executive of Hollinger International, where an investment bank was retained to consider the fate of its assets. Among those are a half interest in Europe's largest newspaper printer, England's West Ferry Printers, which Goss spokesman David Stamp called among his company's "top ... two or three" customer sites worldwide. It also was to be the later and larger site installing Heidelberg presses to print Hollinger's Telegraph Group titles.

Significant for Heidelberg as its biggest newspaper sale -- and for the Daily Telegraph as the source of 80% of its one million weekday copies -- WestFerry never got its five Mainstream 80 presses, which were slated for installation nearly two years ago.

Though presses may be dedicated to certain titles, whatever re-equipping the Telegraph Group does, Express Newspapers "would be responsible for 50% of it," said an executive familiar with operations there. "That's the reason why the press installation was held up," the source added, insisting on anonymity. Led by pornographer and reported Labor Party contributor Richard Desmond, West Ferry co-owner Express not only is the conservative Telegraph Group's unlikely partner, but it also has contractual refusal on West Ferry, complicating the Telegraph's sale.

"Desmond made it clear he wasn't going to invest in any way, shape or form until he was happy" with the arrangement, said the same executive. With East London's much-appreciated property prices, some believe Desmond wishes to sell the Isle of Dogs plant and move printing to a less-costly location. For the approximately $250 million valuation given West Ferry by Britain's Mediaweek, a British media executive said, "I would think a lot of that resides in the land" because most of the equipment is old.

West Ferry has 18 Goss Headliner Offset presses, with some shaftless Colorliner tower additions. The Mainstream (with which Heidelberg entered the large newspaper press market) seemed well-suited to the Telegraph, which never ran collect and produced all sections without later inserting (E&P, June 5, 2000). The gapless-blanket press was one of the first 4-by-1 "straight-only" models, able to print sections of varying page length.

For the Telegraph Group, "it's probably a good thing that Goss [will have] acquired Heidelberg," said the British executive, who speculated that if new presses are installed, they will more likely be a large Goss model than Heidleberg's Mainstream.

Regarding possible acquisition of Heidelberg Web Systems, Goss President Richard Sutis had no comment other than that "we have expressed interest [and] ... had some dialogue with Heidelberg" -- no more than what Goss CEO Robert Brown confirmed almost three months ago.

Late last month, Heidelberg announced a restructuring that eliminates as many as 1,000 jobs worldwide and divests its Web Systems. It cited "good progress" in "negotiations with potential partners" for that business and its "future customer care."

The post-press division is to become a "separate entity," while press manufacturing will focus on sheetfed commercial printing, according to Heidelberg CEO Bernhard Schreier. The company showed first-half losses in its newspaper and digital units. The latter's chief executive retired -- one of two departures from the management board. Heidelberg said its digital unit "must adapt capacities and will refocus its activities. The management board is to "present an appropriate solution" for the unit by spring. It also has been in talks with its NexPress partner, Eastman Kodak.

Heidelberg Web Systems would give Goss, based in suburban Chicago, a U.S. production facility again, as well as a second plant in France.

While regulators examined Hollinger and executives studied Heidelberg, jurors heard Goss argue that TKS tried to hurt its business by selling imported presses at less than fair value, and heard TKS argue that Goss was hurt by its own debt and customer dissatisfaction. They saw no findings from earlier adminstrative procedings that TKS and others "dumped" presses in the U.S.