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Lancaster County's second-largest employer is cutting jobs and has hinted it will close some of its facilities.
But Chicago-based printing giant RR Donnelley, which as of last year employed about 3,500 workers in the county, has been tightlipped on exactly how its cost-cutting strategy will affect the local work force or its three facilities here.
Calls and e-mails to Donnelley's headquarters in Chicago have not been returned.
Shaken by a barrage of economic blows to the U.S. economy and their domino effect on the printing industry, Donnelley's net sales in the U.S. Print and Related Services segment declined for the third consecutive quarter.
According to its second-quarter financial statement released Aug. 6, Donnelley took a $15 million charge for employee termination costs for 2008, including $10.3 million in termination costs in the second quarter.
In its filing with the Securities and Exchange Commission, Donnelley said it has taken several steps to reduce costs and improve efficiency, including "integrating and streamlining jobs." It warned that future moves could include the consolidation of its facilities.
Donnelley, which came here in 1959 by acquiring Rudisill Printing, prints magazines, catalogs and books, in addition to advertising material, business forms, financial reports and telephone directories.
It operates plants on Harrisburg Pike, Greenfield Road and Steel Way. Several workers have confirmed that the company has been reducing its work force in recent months at its Harrisburg Pike and Steel Way plants.
In February 2004, Donnelley merged with Moore Wallace Inc., making it the largest printing company in North America. Following the move, the company announced it would cut jobs, but never addressed layoff numbers or locations.Workers this week have reported that Donnelley's recent cuts in Lancaster County have come mostly by terminating salaried supervisory employees. One employee said that's only because hourly production workers have already been cut to a "bare minimum."
Employees in some departments say they're working anywhere from two to five days per week and that a 5 a.m. phone call notifies them whether or not to report to work.
Another worker confirmed that Donnelly has a policy where first- and second-shift employees must receive two hours' notice if their shift is canceled; third shift employees must receive seven hours notice.
Because of the policy, Donnelley employees say that many workers have collected partial unemployment compensation payments.
Donnelley has not filed notice of the recent layoffs with the federal Worker Adjustment and Retraining Notification Act, which requires a company to notify the government of mass layoffs.
The state Department of Labor & Industry this week confirmed that it is reaching out to Donnelley to determine whether it should deploy a task force, which would assist laid-off Donnelley workers.
Donnelley has invested more than $200 million in its local plants over the past 15 years years, including a $20 million investment in the Harrisburg Pike plant in 2005 aimed at increasing the plant's catalog-printing capacity.
Despite the poor economy, it appears to be in an advantageous position in the printing industry because its prime competitor, Quebecor World, filed for bankruptcy protection in January.
(89) (79) (75) (45) (14) (13) (5) (3)Donnelley's net sales for the second quarter of 2008 increased $127.3 million to $2.92 billion, up 4.6 percent from the same period in the prior year. But Donnelley enjoyed increases of $102.8 million from a trio of recent acquisitions and a $49.5 million bump from favorable foreign exchange rates.
In its financial report this month, Donnelley said demand has slowed for most products and services, resulting in lower volumes and increased pricing pressure. Donnelley said it is "focused on cuts to help offset the impact of continuing economic uncertainty."
E-mail: pburns@lnpnews.com
