Chronicle trims printing contract

The Chronicle plans to cut back on its printing and has renegotiated its deal with the company that prints the newspaper.

In July 2009, the Chronicle shut down its presses and outsourced printing to Transcontinental, a Canadian company, which built a highly automated plant in Fremont under a 15-year, $1 billion contract.

Transcontinental will continue to publish the Chronicle, but will only do about two-thirds of the printing that the contract originally demanded, saving the Hearst-owned paper an estimated $30 million a year.

In exchange for the long-term savings – which Transcontinental said would come from using two printing presses instead of three to print the paper – Hearst will pay Transcontinental $200 million, according to a press release from Transcontinental.

The Chronicle’s average daily circulation has dropped from 251,782 in 2009 to 156,500 today.

Meanwhile, Transcontinental said that it will try to attract new customers now that it has additional press capacity due to the Chronicle’s retrenchment. Transcontinental’s plant at 47450 Kato Road in Fremont is only 9 miles from the Mercury News plant at I-880 and Brokaw Road.

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.

Printing 3-D ad was no big deal

There's apparently nothing different a printer has to do when it comes to printing a 3-D ad. At least that's what the printer of the Chronicle reports after running a 3-D ad for Verizon on Friday.

"There was no problem. We just printed the files as supplied," Kathy Hunter, general manager at Transcontinental Northern California, told News & Tech. The only extra work required was inserting the glasses required to view the ad, Hunter said.

News & Tech says the Chronicle's production of a 3-D ad follows The Philadelphia Inquirer, which earlier this year published a special section with 3-D features. The Toronto Star in April 2001 published a 3-D issue, becoming the first North American paper to do so.

Chron printer adds Metro Newspapers as customer

Transcontinental, which opened a $230 million plant in Fremont last year to print the Chronicle, now has a second customer — Metro Newspapers, which has alt-weeklies in San Jose, Santa Cruz and the North Bay. That's according to News & Tech, a Web site focusing on pre-press and printing technologies.

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.)

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.

What's next for the Chronicle?

With Hearst's decision to put its Seattle Post-Intelligencer up for sale (a first step toward shutting it down), all eyes are turning to the money-losing San Francisco Chronicle. As former Chron city editor Alan Mutter put it:

Given that Hearst Corp. has plowed more than $1 billion into the San Francisco Chronicle without seeing a dime of profit, it’s a fair bet that something is bound to change at my hometown newspaper. The only questions are: What? And when?

Jim Hopkins, the SF-based publisher of the Gannett Blog, does the math a little differently. He says the losses have averaged $800,000 a week since mid-2000. Some 440 weeks later, that would put Hearst's losses in SF at $352 million, not $1 billion. Either way, it's a lot of money.

Hopkins doubts the Chron will go fully digital because it is scheduled to outsource its printing later this year to a new production plant in Fremont being built by non-union Canadian printer Transcontinental.

Even so, I've wondered whether San Francisco would be the first major U.S. city to go web-only. And maybe it still will: The Gannett-controlled Detroit Media Partnership took only a partial step in that direction last month, saying it would end home delivery on all but three days of the week, probably starting this spring. Chronicle publisher Vega knows Detroit well. ... Vega surprised Gannett a year ago by luring away Bushee, who was then top editor at The Arizona Republic. Vega and Bushee have been tinkering on the paper ever since -- with plenty of help from old Gannett acquaintances. (Wink!)

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.

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.

New presses ordered for Chronicle

Montreal-based Transcontinental Printing has ordered three presses that it will use to print the Chronicle starting on May 1, 2009. As the Press Club reported in November, the Chronicle plans to get out of the printing business when its current contract with Teamster pressmen expires and turn the work over to Transcontinental, which will build a plant in the Bay Area. Graphic Arts Monthly reports that Transcontinental is investing $200 million in its new plant here and will install three Coleman XXL presses from MAN Roland. For those who love presses, here are the details Graphic Arts Monthly reported:

The presses will also be the first 6 x 2 blanket-to-blanket newspaper presses in North America. Each shaftless press will be configured with three eight-couple towers fed by four MAN Roland CD-15 XXL reelstands and operated from two Pecom control consoles, and be capable of producing 36 broadsheet pages in full process color, or 48 broadsheet pages with 24 in full color.

The outsourcing of printing is becoming more popular for daily newspaper owners. The three big national papers, NY Times, USA Today and Wall Street Journal, have been outsourcing much of their work for decades, though the Chronicle would be the largest daily to outsource all of its printing. In 2005, 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.

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.

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]