Commercial printers move close to Merc

A is the Chron's printer, Transcon. B is the Merc.
C is the future plant of Southwest Offset.

When the Chronicle decided to shut down its presses and outsource the work of printing the paper every night to an outside company, it hired a Canadian printer, Transcontinental. Transcon decided to build its $200 million, 350,000-square-foot plant to print the San Francisco paper at 47540 Kato Road in Fremont ("A" on the map).

The plant is 41 miles from the Chronicle's offices at Fifth and Mission in San Francisco. But it is only 7.9 miles from the Mercury News press room at 750 Ridder Park Drive near the intersection of I-880 and Brokaw Road ("B").

In January, Southwest Offset Printing is moving its plant from Redwood City to a 68,502-square-foot facility at 587 Charcot in north San Jose ("C"). That plant will be 1.9 miles from the Merc. SOP will be printing USA Today, the Financial Times, the Salinas Californian, the Palo Alto Daily Post, Palo Alto Weekly, Menlo Park Almanac and Mountain View Voice from that location.

Transcon, in addition to the Chron, has picked up three editions of Metro Newspapers that used to be printed by the Merc, and is looking for more customers, according to News & Tech.

"It's slow but steady," said Transcon Operations Manager Mike Bany about the continuing maturation of the facility, according to News & Tech. He said Transcon's primary goal is the production of the Chronicle. But now that the plant's press and packaging workers have more experience, Transcon execs are ready to compete for more commercial business.

New presses to print Chron starting tonight

Tonight is the big night for the Chronicle -- the first edition to be printed by a contractor in a state-of-the-art pressroom in Fremont. Here's a link to the story. We hear that the contractor, Transcontinental, has been running test editions all week — and not just a few papers to prove that the presses work, but an entire press run of 354,752 papers.

The Chronicle has a 15-year contract with Transcon to print the paper. The value of the contract is said to be $1 billion.

As the Chronicle story noted, about 230 Teamster printers will be losing their jobs. The union was picketing the Transcontinental plant earlier but dropped the picket lines last week to allow union drivers could be trained on the pickup procedures at the plant.

Above, Carl Gisen, a pressman for 24 years, monitors sections of the Chron rolling off the presses at the paper's Union City printing plant, which is closing. (Photo credit: Michael Macor, The Chronicle.)

Details about the Chron's new presses

While the world awaits the first edition of the Chronicle from its new pressroom in Fremont, the trade publication Newspapers & Technology has a story that discusses the capabilities of the new, highly automated presses:

The northern California site, scheduled to go into operation late last month, is built around three manroland Colorman triplewide presses. The coldset/heatset presses are equipped with software and other systems engineered to allow press crews to quickly shift from one job to another.

The ability to shift from one job to another might mean that the Chron will do more zoning in the future, or that Transcon will be able to print several papers every night.

Chronicle close to switching pressrooms

In the next week or so, the presses in this $200 million, 350,000-square-foot printing plant in Fremont will produce their first edition of the San Franicsco Chronicle.

The Chronicle is shutting down its unionized press operations and turning over the work to Transcontinental, a Montreal-based printing company which built this plant at 47540 Kato Road, near the Interstate 880-Mission Boulevard intersection.

Transcon announced previously that the plant will have three presses from MAN Roland, each capable of producing 36 broadsheet pages in full color or 48 pages with 24 pages in color. The presses have been running all week, some days doing complete press runs.

With the switch, some 230 Teamster printers at the Chron will be losing their jobs. We've heard reports that they were picketing the new, non-union plant, but when we drove by Friday to take the picture above, two picketers were eating lunch in a car in a nearby parking lot. We heard that earlier an ink truck, driven by a Teamster, refused to cross the picket line and turned around. The SF Weekly has details about that episode.

The Chronicle has a 15-year contract with Transcon to print the paper. The value of the contract is said to be $1 billion.

The plant is closer to San Jose than it is San Franicsco, which has sparked speculation that it might one day print the San Jose Mercury News or other MediaNews Group papers.

Report: Chron facing October deadline

The San Francisco Business Times reports that the new president of the Chronicle, Mark Adkins (he reports to Frank Vega), told staffers that if the paper isn't making money by October, Hearst will shut it down.

The Business Times attributes its information to "insiders."

If true, that's several months earlier than previously stated by Hearst. But Chron management told the Times that there was no validity to that date.

The Biz Times also says that the Chron is re-thinking its Internet strategy and may divide SFGate into two sites -- one that would include more links to external sources and another that would emphasize news generated by the Chron. They're discussing a pay model too.

Meanwhile, the company which is building a $200 million plant in Fremont to print the Chronicle starting in late June says "everything's on schedule."

Ted Markle, Transcontinental’s newspaper svp, tells News & Tech that it's sticking to its plans.

“We are excited and pleased about the progress we have made and the team we are building," Markle says.

“I think it’s a situation where, through this time of transition, there will be winners and losers in this industry, and because of the long-term nature of our kinds of relationships with publishers, we are going to be sure to partner with the winners," Markle says.

The Fremont plant is said to be larger than what's necessary to print the Chron, which has fueled speculation that the other big newspaper publisher in the Bay Area, may contract with Transcon to print some of its papers there as well.

Chron reaches tentative deal with Teamsters

The Chronicle reports that it has reached a tentative agreement with Teamsters Local 853 that could eliminate more than 80 of 235 jobs at the paper held by Teamsters members. The union represents delivery drivers and mailers at the Chronicle.

The 235 drivers are scheduled to vote Sunday on what was presented as the company's final offer, said Rome Aloise, the local's secretary-treasurer.

Departing workers would receive two weeks of severance pay for every year of employment, up to a maximum of 52 weeks.

The Teamsters also represent pressmen and mailers, but the Chronicle indicated that it will exercise buyout clauses in their contracts in June when the paper turns its printing over to a non-union operation, Transcontinental, which has built a $200 million, 350,000-square-foot printing plant in Fremont. By the way, Transcon is hiring.

Last month, members of the newspaper's largest union — California Media Workers Guild, Local 39521 — agreed to contract concessions that allowed for the removal of about 150 positions. Around 120 of those have been achieved through voluntary buyouts (see list at left). Layoffs are expected to be announced in coming weeks, the Chron reported.

New Chronicle printer has a Plan B

Transcontinental, the Canadian company that's building a $200 million plant in Fremont to print the Chronicle, is prepared in case Hearst shuts down the paper. Transcon issued a press release yesterday that states, "The contract signed with Hearst Corporation provides for indemnification should the San Francisco Chronicle cease publication or be sold." In 2006, when the Chronicle signed that contract, it was said to be a 15-year deal worth $1 billion.

Plans to outsource Chron printing on track

Despite the recession and a downturn in the newspaper industry, the company that plans to take over the printing of the Chronicle is moving forward with opening a new $200 million plant in Fremont.

Montreal-based Transcontinental on Friday reported a loss of $94 million for the quarter ended Oct. 31, compared to a profit of $38 million in the same period a year earlier. One reason it gave for the loss was the shutdown of some of its junk-mail operations in the U.S. Transcon eliminated 460 jobs at a junk-mail plant in Pennsylvania last month.

Still, Transcon chief executive François Olivier said in a statement Friday that his company will benefit next year from the 15-year contract to print the Chron.

When presses at the Transcon plant begin rolling, the Chron plans to close its remaining printing plants in San Francisco and Union City, eliminating more than 200 Teamster jobs. A Business Journal article from August points out that the 350,000-square-foot, 300-employee Transcon plant will be able to print more than just the Chron, creating some competition for commercial printers such as Fricke-Parks in Union City and Southwest Offset in Redwood City.

It's not known exactly when the new plant will open. Originally the plan was to open in February 2009, but more recently recruiting ads have said the opening will occur in the summer of 2009. The plant is being built on Kato Road near the Dixon Landing-880 interchange.

Opening of Chron printing plant delayed?

For a couple of years now, the Chron was supposed to switch its printing from its existing plants to a new, non-union operation in Fremont in Feburary 2009. The switch was to take place on the day that the Teamster contract for the paper's printers expired. But hiring some 300 new printers hasn't been easy. Particularly since the union guys work for $28 to $38 an hour while Transcon is trying to hire people at $15 to $18 an hour. Now this ad appears indicating Transcon has hired Manpower to staff its Fremont pressroom. More importantly, the plant's opening is now set for "Summer 2009," not February.

Chron plans to cut another 125 jobs

The Chronicle reported this morning that it will offer at least 125 employees the chance to take a buyout before the end of the year, or another round of layoffs will take place. The story did not say how many of the employees would be from the newsroom.

The cuts come just two months after the Chronicle reduced its newsroom from 400 people to around 300. An in February, the Chronicle will not renew the contract of about 237 Teamster press operators as it turns over printing to a contractor, Transcon, which is building a plant in Fremont.

"Obviously, we're not the first newspaper to be affected by the continuing downturn in advertising," said Publisher, President and CEO Frank Vega. "We are hopeful that by opting for our employees to voluntarily sign up for buyouts we can avoid any type of layoffs going forward."

The program is open to all employees who are not represented by a union as well as employees who are represented by the Northern California Media Workers' Guild, the Chron said. The company said it would consider accepting more than 125 employees and that it has the right to reject as well as accept applicants. If the reduction goal is not met, the company said, layoffs will be likely.

New Chron printer moves ahead with plant

The Canadian company that will take over the printing of the Chronicle next year is moving ahead with construction of its new plant in Fremont, and the union currently representing the paper's printers wants to get its foot in the door at the new plant.

"It depends how much pressure we can put, to have them hire our folks and get them to unionize," Chuck Davis, business agent for Teamsters Local 853, told Brad Kava, writing for the SF Weekly.

The Chron's plan (see previous posts) is to let its contract with the 237 Teamster printers expire next year, and then turn the printing over to Transcon, which presumably would be a non-union operation. Previous reports have said that Transcon plans to spend $200 million to build the 338,000-square-foot plant on Kato Road, near the Dixon Landing-880 interchange. Transcon is looking for workers (see Monster ad).

Kava says the new press will lead to a redesign of the Chron and could also mean better advertising, with ads that might fold out like maps and lead buyers to a store.

Hearst bets $60 million on print's future

Will the printed word die anytime soon? Hearst Corp. is betting it won't. The owner of the Chronicle (as well as lots of money-making magazines and TV stations) is plunking down $60 million to buy a new press for its Albany, N.Y., Times Union newspaper. Why does that matter to anyone in the Bay Area? The Chronicle, which lost about $1 million a week from 2000 to 2006, has signed a contract with Canadian printer Transcontinental to take over its printing 11 months. Transcon is building a 338,000-square-foot plant on Kato Road in Fremont. Construction is under way and Transcon is recruiting workers.

New Chron printer talking to other papers

Transcontinental, the Canadian company that plans to build a $200 million plant in Fremont to print the Chronicle, says it is talking to other daily newspapers about their printing their papers too. Transcon didn't identify those other dailies in its third-quarter earnings report but MediaNews is a likely customer.

Transcon said its planning for the plant is on schedule, the presses have already been ordered and construction will start this fall. The 338,000-square-foot plant, to be located on Kato Road, is scheduled to begin printing the Chronicle in the spring of 2009 when the newspaper's contract with its 237 Teamster printers expires. Transcon said it has launched a program called "Talent Greenhouse" consisting of group of 20 Transcon employees selected to work on the hiring of employees for the Chronicle project. The Chronicle and Transcon have said the 15-year printing contract is worth $1 billlion.

Chronicle to be printed in Fremont

G.W. Schutz of the Bay Guardian tells us (see his comments under "Chronicle urged to go paperless") that Transcontinental, the Canadian company which has a contract to print the Chron starting in 2009, intends to build a 338,000-square-foot plant on Kato Road in Fremont. Schulz says his information is from a Chron source.

Chron Publisher Frank Vega announced last November that the paper planned to outsource its printing to Transcon under a 15-year contract worth $1 billion. Transcon would take over the printing when the Chron's current contract with its 237 Teamster printers expires. Transcon said at the time that it planned to invest $200 million in the new plant and presses. In April, Transcon announced it has bought three presses from MAN Roland, each capable of producing 36 broadsheet pages in full color or 48 pages with 24 in color.

MediaNews might also outsource printing

The Chronicle might not be the only Bay Area daily to shut down its presses and outsource printing to an outside company. The trade publication Newspapers & Technology says it has been told by sources that MediaNews could be a likely customer of the plant Transcontinental Inc. will build to print the Chronicle. As the PPC reported Nov. 17, the Chronicle signed a contract to have Transcon, Canada's largest printing company, print the newspaper beginning in 2009, a move that will allow the Chron to shed 237 Teamster press-operator jobs and about 200 others in the mailroom and other areas. MediaNews publishes the Mercury News, Contra Costa Times, Oakland Tribune, Marin Independent Journal, San Mateo County Times and other dailies. MediaNews also owns the Palo Alto Daily News and its chain of free dailies, whose printing has been outsourced for several years to Southwest Offset in Redwood City.

Chron printers to vote on contract Sunday

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.

Chronicle to outsource printing

Chron Publisher Frank Vega (pictured) announced today that his paper is getting out of the printing business and has signed a 15-year contract with a Canadian company to print the Chronicle at a new plant in the Bay Area in 2009. Transcontinental Inc., the seventh largest printer in North America and the largest in Canada, will build and own the presses.

The story didn't say how this switch will affect the Chron's 237 unionized printers, who have been negotiating for a new contract after their last one expired on July 1, 2005, or other pressroom employees. Including the printers, the Chronicle's pressroom employs 400 to 450 people. The Web Pressmen & Prepress Workers Union Local 4N held a demonstration in front of the Chronicle on Aug. 11 to complain that the paper had not been bargaining with them in good faith and was attempting to gut their previous contract.

Transcon, in a press release, said the contract with the Chronicle plus the printing of other products at this new plant will surpass $1 billion in total revenues over the 15-year period. Transcontinental said it plans to invest $200 million in the plant and presses. A physical location for the new plant wasn't disclosed.

It's unusual but not unprecedented for a contractor to print a daily newspaper. Last year, the 70,000-circulation Daily Breeze in Torrance, Calif., shut down its printing operation and outsourced to Southwest Offset in Gardena, Calif. Southwest also prints the San Mateo Daily Journal and the Daily News Group (Palo Alto Daily News, San Mateo Daily News, etc.) at its plant in Redwood City. The Chronicle is believed to be the biggest U.S. newspaper to outsource all of its printing.

[PPC, Dec. 19, 2005: Chron may outsource printing] [PPC, Aug. 8, 2006: Chron pressmen's union to picket] [PPC, Aug. 12, 2006: Chronicle union faces Tuesday deadline]

Chronicle may outsource printing

SF Chronicle Publisher Frank Vega (photo left), known as "Darth Vader" by friends and foes, says the paper "has been in discussions with a third party" about contracting out its printing. That would leave the Chron's 450 union printers and mailers without jobs. Newspapers & Technology, a printing trade publication, says a Canadian firm, Transcon, may be a contender for the job. Locally, the San Mateo Daily Journal and the Daily News Group (Palo Alto Daily News, San Mateo Daily News, etc.) outsource their printing to Southwest Offset in Redwood City. Southwest also prints the 70,000-circ Daily Breeze of Torrance, Calif, at its Southern California plant.