Shortly after making a $100 million acquisition, Quad/Graphics Inc. is planning to shutter its St. Cloud facility—putting the future of 280 employees in jeopardy.
Quad/Graphics Inc., which is headquartered in the Milwaukee, Wisconsin metropolitan area, expects to shutter its St. Cloud production facility by the end of August, according to spokeswoman Claire Ho. She said that the plant, which primarily produces magazines, will ramp down production, transitioning client work to other facilities, in the meantime.
Ho said that the closure is not due to performance issues; rather, she characterized it as “a straightforward business decision, and a necessary part of integrating operations following an acquisition.”
Quad/Graphics will have a hiring manager on-site in St. Cloud this week to inform affected employees of openings at other plants, including facilities in Waseca and Shakopee. Those that don’t end up with other jobs at Quad/Graphics will receive separation packages, Ho said.
Quad/Graphics produces traditional print publications such as magazines and also provides various multimedia solutions. The plant closure stems from Quad/Graphics' $100 million acquisition of Waseca-based Brown Printing Company, which was completed in late May.
“We’re moving forward with our integration plans,” Ho said. In the wake of the Brown acquisition, “we’re looking at how we build the strongest, most competitive platform, consolidating work into plants where we believe we can create manufacturing and distribution efficiencies.”
The combined company is expected to generate roughly $350 million in revenue. When announcing the completion of the Brown acquisition, Quad/Graphics said it would be taking on Brown employees, and it touted the fact that the combined entity would employ more than 25,000 employees and operate more than 70 print-production facilities worldwide.
“As Brown's employees and operations join our worldwide platform, Quad/Graphics is better positioned than ever to help magazine publishers and catalog marketers capitalize on the power of print and integrated media solutions to further drive results,” CEO Joel Quadracci said in May. “I am excited to welcome Brown employees and clients to Quad/Graphics’ family and begin working as one combined company.”
The company did not indicate at the time that it was planning layoffs, although it said the combined entity would “realize efficiencies and cost-savings through a superior and more efficient operating platform and procurement programs.” (Brown Printing has been the longtime printer for Minneapolis-based MSP Communications, parent company of Twin Cities Business.)
Quad/Graphics' decision is the latest blow to St. Cloud's labor force. Verso Paper closed its nearby mill following a fire, and scrapbooking company Creative Memories filed for Chapter 11 bankruptcy and laid off area employees last year.
The St. Cloud Times, which first reported the latest plant closure news, pointed out that Quad/Graphics' decision impacts the largest amount of employees since Fingerhut laid off 1,200 people in 2002.
In positive news for the local economy, German farm equipment manufacturer Geringhoff pledged a couple of years ago that it would invest $20 million to establish a factory in St. Cloud, where it planned to employ 100 people. And Marco, Inc., another major area employer, said last fall that it planned to grow its workforce after acquiring a St. Paul-based firm.