Special Report: What Does Quad's Worldcolor Acquisition Mean to the Marketplace?
BROWN: It will be fun to revisit this question in five years. Right now, it looks like a massive diversity exercise, which could, of course, be positively wonderful. But let's consider the ingredients of the stew.
Quad's approach to press and bindery equipment is to buy new, upgrade often, and tweak everything to a fare-thee-well so that their production processes are unique. QuadTech is not simply an ancillary business but a clarion call in the plant—we can invent a better way. The original Worldcolor made it a virtue to keep on repairing those Harris M1000As until every dime was sucked out of them; it was financial management without a nod to the pressroom floor. Quebecor tended to spend more lavishly, but it sought standard, repeatable processes and let equipment manufacturers define problems and solutions. Quad's culture is flat-out exhilarating from a tech standpoint, and there's a bit of QuadTech hardware in some of today's Worldcolor plants. Perhaps the operational merger will result in an elevation of everyone's attention to process refinement, with an emphasis on in-house tech skills. But Worldcolor doesn't even train its crews to think like Quad does. How would you like to do your job to your company's complete satisfaction for many years and then have a guy in a Quad flight-suit start telling you that you've got it all wrong? It will either be ugly or invigorating. And, remember, it will be nearly impossible for Quad to believe that there's a single good idea in any Worldcolor plant, so the dialog will go only one way, and that will be a mistake that shortchanges the best people at Worldcolor.
Quad and Worldcolor have distinctly different sales approaches. Of course, this merger is all about allowing Worldcolor to be able to sell on something other than cutthroat pricing. It may or may not have that effect, but surely the idea is to allow the sales message to lean toward Quad's "print with us and pay a premium because we're the best." The tricky part is that Quad's premium rested in part on a culture that customers could perceive as different. When you tour a Quad plant, you may want to apply for a job as much as you want to send your printing there. Will Quad's mystique survive the merger? Will it percolate to Dyersburg and St. Cloud? If the merger is to succeed, the net market price would rise, but not, most probably, to the lofty peaks Quad used to charge. I wouldn't expect Worldcolor's sales techniques to entirely blot out Quad's, but I imagine that sales will be more closely listened to when a deal is brought in for management's blessing. Worldcolor does know the market, and the prices they've accepted have become prevailing trends that Quad must accept. Aside from price itself as a sales tool, the combined company will be fusing sales forces that differ in temperament, training, company prestige and compensation. I'd expect the Worldcolor way to beat out the Quad style if only because the Worldcolor sales personnel are politically more savvy.