Gene Geiger Discusses Decision to End Geiger's Manufacturing Business
Geiger, the top 50 promotional products distributor based in Lewiston, Maine, announced yesterday that the company will shut down its printing and manufacturing division in 2013. The company's print business, which began when Geiger was founded in 1878, includes the Farmers' Almanac and the SunGraphix line of diaries and calendars.
Gene Geiger, MAS, CEO of Geiger spoke with Promo Marketing today to discuss the decision to wind down its manufacturing business and the impact it will have on the company.
"We made a business decision that, given where we stand, given the sales trends, given the money we have to invest in new equipment and new product development ... it was too great a risk and too great a cost for too small a part of our company," he explained. "We decided from a sober business perspective to get rid of something that isn't our future and focus on what is our future."
The manufacturing division accounts for less than 10 percent of the company's business. Geiger noted that despite looking like an easy business decision, it was still a difficult choice to make. "From a business point of view it's simple. From an emotional point of view, where you care about people who have put their lives in your hands, it's excruciatingly difficult and sad," he sad. "We kept it going, logically, beyond where one should have kept it going. But we did it because we are emotionally invested in it and wanted to give it our all."
While initial reports stated that the company would lay off 75 employees as a result of the decision, Geiger explained that the actual fallout would be less. He anticipated that up to 25 people will be moved into various positions in the company's distributor business, with some employees already transitioning. Further, manufacturing will not be ending immediately. "My anticipation, given all the work we have in house and that I expect we're going to get, is that we'll be producing for as much as the next six months," he said.
As for its printed properities, the company is looking into options for the future. Geiger will still remain the publisher of the Farmers' Almanac, with printing and binding handled at another plant to be determined in the future. The company is in talks with other manufacturers to possibly produce the SunGraphix line.
The company's CEO reaffirmed that the distributor business, which makes up the bulk of Geiger's revenue, is doing well and that the decision to end manufacturing does not reflect on the company's overall state. "[The distribution side] is growing and is profitable and, in all likelihood, grew faster than the industry as a whole did last year. Things are fine over there," he said. Geiger came in No. 5 on Promo Marketing's Top 50 Distributor List of 2012, moving up from the No. 7 position in 2011 with about $18 million more in sales.
"That's the positive side of this decision: we're all-in with the distributor business," he said. "We've invested there and we are not going to have resources bleeding into an area that is not profitable. We can invest those resources into something that is profitable and have the greatest benefit from a business point of view." The funds spent on the manufacturing side of the business will be redirected toward the distributor side, investing in e-commerce and other technologies.
The focus going forward, Geiger said, is in adapting to the marketplace to better serve its customers. While ending the company's legacy printing business is unfortuante, he said it was a sign of the times. "It's an example of how business and market conditions change and how businesses have to change with them," he explained. "If you don't change, you're going to end up going out of business. Change is disruptive and it can be personally harmful but it opens up new opportunities, and that's how we are looking at it."