News

Quebecor World's Corby unit has been placed into administration in a twist Unite has dubbed an "unmitigated disaster" for the Canadian-owned group's UK workers.

Administrators Ian Best and David Duggins of Ernst & Young were appointed to the 290-staff plant on Monday (28 January).

A statement released by Quebecor World's Montreal headquarters said the recent round of investments at the plant, which had been designed to improve its performance, had been unsuccessful.

It added that the site had been losing money since the loss of its contract to print supplements for Associated Newspapers three years ago, and that overcapacity in the long-run industry meant that an improvement in the firm's performance would be too costly to undertake.

Quebecor World's statement said that following the appointment of administrators, they would "consider all options with regard to the way forward including a possible sale of the business".

Unite assistant general secretary Tony Burke said: "For our members and their families, this is an unmitigated disaster caused by classic mismanagement at the very top of the company. We don't blame the local management, who have been kept in the dark as much as the workforce has.

"Our first priority is to our members and their families and since the announcement yesterday, we have been speaking to a number of people within the industry with a view to seeing if they can purchase the business as a going concern. We hope that Corby’s customers will stay with the company."

The administration comes just a week after Quebecor World's Canadian operations were granted creditor protection, and its US subsidiaries were placed into Chapter 11 bankruptcy protection.

At the time, the UK site's management urged calm over the future of Corby, saying that it was "cash generative".

For more on this story, click back to this site and see Thursday's PrintWeek.

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MONDAY'S STATEMENT
Montréal, Canada – Quebecor World Inc. announced today that its UK subsidiary, Quebecor World PLC, based in Corby is being placed into administration. Quebecor World has made significant investments in this web offset facility in recent years. These investments combined with important employee and management contributions were designed to turn around this business but these efforts have been unsuccessful. The UK facility has been cash negative since the loss of an important contract three years ago. Given the overcapacity in the UK printing industry, challenging market conditions and reduced demand for print in the UK market, the Company does not believe the situation can be improved without further investment and significant restructuring.

As a result the Directors of the Quebecor World PLC having regard to Quebecor World PLC's current financial position, have decided that it would be in the best interests of its employees and creditors to appoint Ian Best and David Duggins of Ernst & Young LLP as joint administrators of the Company (the "Administrators") effective on January 28, 2008. Following their appointment, the Administrators will consider all options with regard to the way forward including a possible sale of the business. The Administrators will provide a further press release shortly.

The Corby facility is located in the central UK about 70 miles north of London. It currently employs approximately 290 people and produces magazines, catalogs [sic] and specialty print products for marketing and advertising campaigns.

This decision is not related to Quebecor World's filing for credit protection in the United States and Canada and has no impact on its other European facilities. The Company's other European facilities continue to operate as usual serving many of Europe leading publishers and retailers.