This is the latest information I have.
26 June 1994
To: ARL Directors
From: Ann Okerson
Re: Faxon Updates at ALA
A summary of information provided at Faxon meetings and events at ALA
follows. The statements that were made to customers at the Breakfast on
Saturday morning and to Duane and me later, were generally successful in
reassuring cusstomers that developments are on track and 1995 payments
being made by libraries are secure.
o At the Faxon breakfast, Michael Markwith (Director of Sales) and Judy
Davis (current CEO) expressed thanks for the loyalty and support of
their customers. According to Davis, the current transition (sale)
continues a long tradition of embracing change. Over time, customers
are likely to see lots of re-structuring, new services, and enduring
focus on the client.
o The timetable is that the European sale (Swedish, German, Russian,
Dutch, UK, and French offices to Swets) should be completed by mid-July.
Then the principals will turn their fullest attention to the sale of
U.S. and Canadian holdings (i.e., offices that process orders for
customers) to the R R. Donnelley company. If all things continue to go
as well as they have so far, completion of that sale will happen by the
end of August (there may be some slippage, of course).
o Rory Cowan, Executive Vice President responsible for the IT sector was
introduced at the Saturday breakfast and reviewed some key points about
RRD:
* RRD is an independent corporation with no connection to any
publishers in an ownership sense, though it deals with publishers
through its various services, mostly printing contract. It prints
books, catalogs, magazines all around the world. Cowan sees information
moving to bases that are more timely, local, specialized, and customized
than the current publication system. He believes this will make for
profound changes in the way in which work is disseminated and that RRD's
acquisition of Faxon will make for a strong combination, positioned to
play an important role in the new information future. The move to
"imaging systems" will change everything; potentially no more back
lists, unfulfilled claims, as all storage becomes electronic.
* Faxon also has a similar independence from publishers; it has a
similar family-based history and culture; a futuristic and compatible
technological vision, good direction, orientation, customer
service/base. RRD sees a good match in these ways also.
* RRD will give Faxon stability, technology advancement. Cowan
sees Faxon as a company that is sound in most ways but flawed in its
execution of an over-ambitious expansion -- on the technical side *and*
in globalization. It is hard to do both well at the same time; in this
case, the attempt proved very expensive.
* The accountants will finish their review at the end of this
coming week. A meeting has taken place with publishers. At this time,
very little will change. Location, name, staff, will remain in place;
the Westwood enterprise will be reinforced.
* RRD has continuing, enduring commitments to literacy in America
and to education. It contributes heavily to local libraries and will
continue to do so.
o Security of 1995 monies: Markwith assured customers that 1995 payments
are earmarked and set aside for payment of 1995 subscriptions, not day
to day operations or past indebtedness. He is willing to provide
clients' financial officers with assurances of this in paper form as
needed.
o RRD will be the sole owner of Faxon.
o Many things cannot be publicly discussed at this time. For example,
it was not clear whether the 1994 subscription money that Faxon owes
some publishers can be paid off in full or not. A number of issues
remain to be explored, discussed, and negotiated as the deal proceeds.
Many of these are, understandably, highly confidential.
o Customers will be kept informed. The transactions are complex and
proceeding as quickly as possible.
Anita Morse
U.Michigan SILS
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