The Topic is Naming Names: Yves Rogivue, CEO of MAN Roland Answers Questions about His Challenge to Competitors. This interview was conducted with input and in part by WTT contributing columnists Molly Joss and Gail Nickel-Kailing October 29, 2002 -- In our Top Five News feature, the most visited story last week was MAN Roland’s call to competitors to place names with their Graph Expo sales numbers. Based on the feedback we received from competitors of MAN Roland, they were not impressed. On the other hand, printers we spoke with were intrigued by MAN Roland’s move to go public with their complaint. Surrounded by product news and earnings announcements, it was an item that clearly stood out. Most printers know how to handle the PR machines that get cranked up during a trade show. But when the CEO of one of the industry’s leading suppliers says competitors are exaggerating their numbers, it certainly deserves a closer look. We caught up with Mr. Rogivue last week. WTT: Yves, the release sent a shockwave through the industry and there have been many additional questions raised since. Tell us why you felt it was important. Is there a specific issue that came to light that caused you to move forward with the call to name names? Yves Rogivue: At issue is the integrity of our industry at a time when the credibility of the American business community is at an all-time low. The graphic arts is one of the leading industries in America, and I believe you lead by example. WTT: Everyone we spoke with agreed that it’s wrong to exaggerate press sales. But some say this has been going on for years and is almost an accepted tradition at least as far as the estimating of sales/deals after a trade show. How do you think manufacturers should communicate their success, or lack there of, after a show? What should be the standard? Yves Rogivue: I think it’s fine to make general statements, like "we had a great show," "traffic was up," or even "sales exceeded our expectations." All of those declarations are certainly the case in terms of our exhibit. It’s good for the industry to know that Graph Expo 2002 was a very positive experience, because part of turning things around is changing the mindset of the marketplace, from pessimism to optimism. I don’t think we need formal standards. I would just like to see a gentlemen’s agreement among manufacturers that we don’t issue wildly exaggerated numbers. Such claims just add to an already confused economic picture, and that distracts us from our main course of action: to get our industry growing again. WTT: Have printers expressed frustrations to you about post-show sales releases from the suppliers? Yves Rogivue: I think in the past they found them amusing, because they knew the claims have little basis in reality. Unfortunately, that muddies the waters for everyone, because when you put out a legitimate release, its credibility is questioned. This issue should be a critical one for members of the trade media like WhatTheyThink.com. If you’re publishing these claims and everyone knows they are exaggerated, your credibility comes into question as well. My point is that we should close this credibility gap now for everyone’s benefit. WTT: We all have a pretty good idea of the companies you are speaking of, but specifically, which manufacturers should release names? Yves Rogivue: We’re calling on the people in our spectrum of the marketplace — the major press manufacturers. WTT: Some manufacturers often announce the big deals in press releases, but is it proper to ask your counter-parts to release what is really their client list? Yves Rogivue: If they’ve already closed the deals, what do they have to be afraid of? We’re not going to "steal" a client who has already signed on with someone else. WTT: Would you release the names to us of the customers you took orders from at Graph Expo here as a first step? Yves Rogivue: That really wouldn’t be fair, since we’re competing against companies that refuse to name names. As you know, there’s more to it than just sending out a release with your customer’s name on it. Clearances are involved, the client’s marketing efforts must be taken into consideration. So it takes some work. We’re willing to do it, if our competitors are willing to do it. But first we want a level playing field. WTT: MAN Roland released an article at GraphExpo regarding creative financing and you also refer to the practice in the Naming Names press release. For those who have not seen it, tell us about creative financing. Yves Rogivue: In the case of the graphic arts, creative financing happens when a press manufacturer buys market share by giving a 12-month or more "no payment" or "reduced payment" period to a business that is not credit worthy. Here is what we have communicated: (Editor’s note: MAN Roland prepared a brief by their CFO Eric Belcher at GraphExpo. It is available by contacting the company and contains additional information besides the three points below.) “While the offer sounds good at first, it quickly becomes a no-win situation for the printer for three reasons: “One: The manufacturer will either increase the price of the equipment or the size of future payments to make up for the 12-month shortfall. “Secondly: The printer is not able to run his business according to the reality of the marketplace. He has artificially low payments (or no payments) up front and artificially high ones down the road, distorting the true nature of his cash flow. “Third: As the printer runs the press, it depreciates in market value. However, the debt load on the printer’s balance sheet does not decline accordingly, causing the balance sheet to become "upside down". Carrying this type of exposure on a balance sheet jeopardizes the long-term financial health of a company. “Manufacturers who engage in such offers are doing a disservice to the entire graphic arts industry because the schemes add potentially unwarranted or artificial capacity to the marketplace. That lowers print prices, which in turn reduces the value of printing to that of a commodity.” WTT: Are you saying that printers who default on their presses or have equipment repossessed for financial reasons are actually finding new vendors that will sell them equipment knowing the printer’s financial condition? Yves Rogivue: It’s not quite that bad. But we did have an incident at Graph Expo in which one of the major press manufacturers announced the sale of a big press it was demonstrating at the show to a printer that we had turned down for financial reasons. The sale of the press was ultimately withdrawn. WTT: In the end, do you think this call to change will result in any change at all? Yves Rogivue: Just the fact that we’re having this discussion means this is an issue worth addressing. And once we address an issue we have the opportunity to effect change. Will the impact be immediate? I doubt it, but as I said before, now is a good time for our industry to start changing for the better. Thank you again Yves, for sharing with our members. This interview was conducted with input and in part by WTT contributing columnists Molly Joss and Gail Kailing