Industry reacts to MLG buyout

Pamela Mardle
Friday, January 18, 2013

Scottish printer Montgomery Litho Group's (MLG) resurrection has polarised industry opinion.

Some have applauded the rescue of 76 jobs, while others raised the issue of unfair competition.

One of Scotland’s biggest player, MLG’s Edinburgh plant is due to close for good this weekend following Perth’s staged closure throughout 2012, while Glasgow’s production director Janette McAllister came to its rescue following the group's collapse last Friday, retaining the staff and assets of MLG’s "most profitable" business.

Thomas Montgomery, MLG managing director prior to it falling into the hands of KPMG's liquidators, has since walked away from the company, leaving McAllister to run the contracted Glasgow operation as McAllister Litho Group, with sales executive Jeff Simants stepping up as sales manager.

Bob Hodgson, head of Graphic Enterprise Scotland (GES), the country's industry body, said: "It is good to learn that the Glasgow location will continue in business under the ownership of Janette McAllister. This must be in the best interests of those employees left, the customers and the Scottish printing industry as a whole.

Meanwhile, ex-MLG employees have taken to LinkedIn to air their views and search for new employment. Ken McCallum, former sales manager at MLG's Edinburgh-based subsidiary Scotprint, wrote: "I am looking for a job as sadly MLG Haddington closed on Friday 11th. Felt strange after 15 years with the Group and 12 years at the Haddington site!"

Glasgow-based DCI Print Management’s managing director Gary Burnett said on the social network: "My thoughts go out to the many families associated with the people losing their incomes with yet another blow to the Scottish Print Industry."

But others have said that the collapse of Scotland’s "biggest player" was a long-time coming, commenting that MLG had been "firefighting" the situation for months.

The company had allegedly been selling off assets, and sources said it was "common knowledge" that secondhand dealers were valuing MLG equipment at the back end of 2012.

It has emerged that ex-Scotprint corporate sales director Bobby Dalgleish was made redundant in August 2012, rather than "jumping ship" to his role as business development director at 21 Colour as PrintWeek originally reported.

A source told PrintWeek that there had been an "unusual spike" of MLG employees looking for alternative employment in the last five months of 2012, prompting speculation about the company’s future.

MLG Edinburgh general manager Andrew Montgomery, who will be made redundant at the end of the working week along with the nine remaining staff at the closed subsidiary, said the dire situation of UK manufacturing as a whole had meant that the company’s collapse was not surprising.

He said: "The last few years have been very tough. For a long time, governments haven’t supported manufacturing so I don’t think it is any surprise that the sector is really suffering during the course of Britain’s worst recession in living memory.

"But the speed at which things came to an end [for MLG] was quite surprising. It is great that jobs have been saved in Glasgow but Thomas [Montgomery] is obviously devastated by what’s happened.

"What has really upset him is the number of people that he has known for such a long time who have lost their jobs."

Former Scotprint publications and cartographic sales director Norrie Gray, who was also a casualty in last Friday’s cuts, said on LinkedIn: "Sad day for everyone at Montgomery Litho Group, especially for Tommy [Montgomery], who tried everything possible to keep the company going."

Montgomery implemented a 10% pay cut across all three businesses three years ago to try to save the company in the face of a £1.2m pre-tax loss in 2011 and the loss of MLG Perth’s contract with insurance firm Aviva.

Ink Shop managing director Stuart Mason said: "There has been an indication that MLG wasn’t doing particulary well for a long time but I had hoped that for a company of that size, employing that many people, cut backs and savings could have been put in place to save them going down.

"But the shock and sympathy for MLG is counterbalanced by the fact that it [shouldn’t] be prepacked. I think the vast majority would agree that we are not having the easiest time in Scotland and for such a big company to have such a significant competitive advantage in a marketplace that is hurting, it would not be fair. Suppliers have got to take notice of that.

"It is difficult because there are so many people involved and the heart says you’ve got to look after the jobs and do something to bolster the Scottish print industry. But the head says why should I pay my bills when a significant competitor doesn’t have to."

J Thomson Colour Printers, which is a supplier for the Scottish government print contract alongside MLG, also had mixed views: "There are two sides to how I feel about the MLG situation.

"On a personal level I am sorry and saddened for all the employees who are losing their jobs at this particularly difficult time [because] it’s not their fault. On a business and professional level I believe the resurrection of MLG Glasgow is fundamentally wrong.

"A business such as this does not fail without reason. It has failed in the same way as all the other printing companies whom the industry has lost. A new company with no debt now stands to compete in a market that will undoubtedly be further damaged.

"If these situations are allowed to continue the printing industry will continue to suffer from lack of investment, will remain in the doldrums and will be very much worse off because of it."


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