An employee feeds paper into a printing press at the Toronto Star printing plant in Toronto, Ontario, Canada, on Wednesday, July 6, 2011.Brent Lewin/Bloomberg
Faced with the continuing pressures of a print publishing industry in decline, the Toronto Star is closing its printing plant and culling its head count.
When the newspaper shutters its plant in Vaughan, Ont., likely in July, it will contract out printing of its daily editions to Transcontinental Inc. through a five-year deal that can be extended if printed papers are still considered vital by that time.
The move signals a recognition of the new reality for newspapers like the Star after years of falling print advertising revenue, but comes at a hefty human cost. The plant's closing means 220 full-time and 65 part-time staff at the plant will lose their jobs, and the Star also announced Friday it is cutting 13 digitally focused positions from the newsroom, 15 from circulation and offering voluntary buyouts to remaining newsroom staff.
The Star's decision to get out of in-house printing comes just as it invests tens of millions of dollars in a new tablet edition, called Star Touch, which has spurred the paper to reorganize its newsroom to be more digitally focused. Yet, the new printing contract, which runs until at least 2021, signals the Star is not yet ready to stop publishing with ink on paper any time soon.
"That's the minimum lifespan, but we don't even think of it that way. It's a commitment to spending five years figuring out what the next iteration of the Toronto Star in print will be," John Cruickshank, the Star's publisher, said in an interview.
Torstar Corp., the Star's parent company, said the transition to outsourced printing will cost $22-million, much of it severance pay, but expects to save about $10-million annually after that. The existing plant sits on more than 17 hectares of valuable land, which could fetch between $25-million and $50-million when it's put up for sale, according to an estimate from Haran Posner, an analyst at RBC Dominion Securities Inc.
"This is a plant that was conceived more than 25 years ago. It's of a generation of printing plants that are great at printing very high volumes, but not so efficient at lower volumes," Mr. Cruickshank said.
"We are moving to a next-generation printing facility that will give us more colour, sharper colour, better printing, all told," he added. "So there's a consumer win in this, and it's just sad that it happens in the course of a change like this."
Delivery of the Star will continue unchanged under the new arrangements, the company said.
Of the 13 newsroom jobs being cut, 10 are short-term contract staff who helped the Star launch its new tablet edition. Their contracts are being terminated early. The Star hired 70 new staff for the newsroom to prepare the tablet edition, but "we always understood that that might not be the right number," Mr. Cruickshank said, adding that the Star Touch app is "closing in on 200,000 downloads very quickly."
At the printing plant, most of the staff are unionized members of Teamsters Local 100M. Kevin Logan, the local's president, will meet with the Star next week to discuss severance terms and how to ensure a smooth transition.
"We can try to do things for people, but I mean, this business is really, really challenged right now," Mr. Logan said in an interview.
Torstar recently lost a contract it had to print some copies of the National Post at the Vaughan plant when the national paper shifted its printing to a west-end Toronto facility that its parent company, Postmedia Network Canada Corp., acquired through last year's purchase of Sun Media assets. "It was a big deal," Mr. Cruickshank said, because having the Post on board helped defray the costs of operating the plant."When they lost the Post, everybody started living on nerves," Mr. Logan said. "I didn't really see this [coming], although you'd have to be blind not to see that it was a distinct possibility."
The Star will now shift to Transcontinental's nearby plant, also in Vaughan, where more modern presses also print The Globe and Mail using fewer staff.
"This agreement further demonstrates the ongoing interest in our ability to help publishers across Canada become more efficient," Brian Reid, president of TC Transcontinental Printing, said in a statement.
"In our view, the agreement is positive for both companies although not overly surprising," Mr. Posner said in a research note. "We felt the decision by Postmedia to internalize printing of the National Post last summer … could be a catalyst for an outsourcing deal with Transcontinental."
James Bradshaw