Open Bars and Lawyer Letters

In the early 1980s, a multi-association management company ran the graphic arts dealer trade association. The annual meetings of the dealer group were officially planned each year by a manufacturer. The most active members were the manufacturers. Ostensibly this organization provided a forum where channel issues, vital to all the suppliers' economic viability, could be openly and frankly considered in a collegial setting. Yet the industry's restrictive "information culture" was largely preventing this. In place of candid dialogue a culture of enforced conviviality had grown up. Meetings were treated as annual - paid and tax deductible - holidays by larger dealers and manufacturer managers. Key factors for conference site selections were golf courses and luxury accommodations. Conference fees covered open bars each evening. A good time was had by all. However, little of substance regarding channel relations was discussed.

While they were plotting to form an alternative, dealer-led trade group, many of the dealers attended the regularly scheduled annual meeting of the existing group – held in Hawaii. They had planned to raise important issues about the channel policies of a major vendor. When they arrived, however, association managers handed out copies of an attorney letter advising that such discussion would likely be illegal and therefore not sanctioned by the organization. No effort was made to broach the subject - which was far wider than one vendor - in a legal manner. With nothing to talk about, everyone decided to have a drink, attend the luau and play golf. The impetus for a dealer-only organization surged forward.

Mug Shots on the Wall

The first dealer-led association was launched in 1983, and THE EAGLE was made the official journal of the organization. An advocacy attorney was hired whose job was to enable discussion of sensitive issues not warn against it. A "model dealers contract" was drawn up and voted on. Resolutions for reform of the channel were adopted and "line committees" were formed which undertook to have direct meetings with key manufacturers. The meetings were a true breakthrough for the dealer community. Finally, under the auspices of their own organization, the dealers could bring issues to the table that affected their ability to be viable, remain loyal to their vendors and to serve their customers.

Ominously, some dealers chose not to participate, warning that outspoken dealers would eventually pay for their actions. Gallows humor prevailed in which some dealers said a list was being compiled of the recalcitrant members. Indeed, some had heard the association and its leaders, well-known and long established dealers, referred to by manufacturer managers as "radical." The culture of censorship and control was confusing dialogue with disloyalty and questions with confrontation.

At the time of the association's formation, Fujifilm of Japan had lost to bankruptcy its one, exclusive dealer in America. It now sought independent dealers across the country to sell Fuji products. Fuji had adopted the new association's model contract, the only company at that time to do so. It offered dealers higher margins. Its products were proven worldwide. Many dealers, understandably, wanted to represent the new line. Globalization had arrived.

But many in the industry were unprepared for global markets. Word spread in the channel that taking on the Fuji line - even though all dealers carried multiple and competing lines - would be viewed as a contract violation, punishable by termination. Some of the same dealers who were active in forming the new dealer organization took up Fuji's offer. Most, however, held back in fear for their business lives.

The freedom of a dealer to sell whatever lines it chose, a topic that had been silenced in the press and at industry conferences, came to the surface. Restraint of trade was whispered among the dealers. Talk of "disloyalty " and lack of "patriotism" was spoken of by some manufacturers.

At this same time, the new dealer association chose to organize a dealer-led trade delegation to Japan to look firsthand at Japanese product opportunities and to talk with Japanese dealers.

Fuji (film, plates, proofing), Hamada (printing presses), and Dainippon Screen (graphic arts cameras, scanners and digital imaging equipment) offered to host meetings with the US dealer group. A Japanese trade association in Japan that included Konica and others invited the American group to a special dinner and dialogue. The trip also included attendance at a graphic arts trade show in Hong Kong where still other Asian suppliers would be met.

While many dealers expressed initial enthusiasm in participating, as the date for departure drew near, cancellations increased and promised registration forms did not appear. One dealer summed up the growing reluctance to take the trip. "I would love to go, but I don’t want my picture on a tour of a Japanese factory coming back home and put up on a manufacturer's wall like a mug shot." A picture, it was meant, could be a dealership's economic death sentence.