|Publishing House faces 'hard budget realities'|
By Kathy L. Gilbert*
July 27, 2007 | NASHVILLE, Tenn. (UMNS)
Publishing House publisher and CEO Neil Alexander addresses the board of directors.
Soaring costs and a projected 2 percent decline in annual sales has
forced the United Methodist Publishing House to lay off 3 percent of its
workforce and make other cost-saving changes.
Thirty of the agency's 1,000 employees were laid off in July and
approximately 20 vacant staff positions will not be filled, according to
Neil Alexander, publisher and CEO of the Publishing House.
The 2 percent sales decline follows a multiyear trend, but the
effects are compounded by a rapid rate of increase in expenses, he said.
"We have deep compassion and concern for the well-being of the
affected staff persons, and the layoffs come only after many other
cost-saving measures have been instituted," he said. "All eligible staff
receives multiple weeks of severance pay based on guidelines that take
into account years of service and age, plus extended free health care
coverage, and outplacement counseling and support."
Significantly higher costs for employee pensions are among factors
cited. Pension expenses will be $700,000 more than projected due to an
error made by the outside actuary who estimates the company's future
liabilities, Alexander said.
"In calculating fiscal year 2007 expense, the firm made an outright
error in adding up costs, leaving out an important factor in the
calculations," he said. "It is as confounding and as simple as that.
They didn’t add up all the numbers in all the columns. This meant that
costs were greater in FY07 than planned, and a similar increase in costs
must now be projected for FY08."
Alexander stressed that the corrections have not changed the actual cost of the pension plan over the next years.
"The United Methodist Publishing House has more than ample total
assets on its balance sheet to provide for our pension liabilities," he
Rising costs, stagnant revenues
Other factors cited by Alexander are higher costs for manufacturing
products and health care and rising occupancy costs for its Nashville
headquarters and distribution center and its 70 Cokesbury bookstores.
"We have deep compassion and concern for
the well-being of the affected staff persons, and the layoffs come only
after many other cost-saving measures have been instituted."
-Neil Alexander, Publisher
The Publishing House is self-supporting and receives no money from
the general funds of The United Methodist Church. All operations are
financed from revenue earned each year through publishing and retailing
"Ventures such as the 'Live B.I.G.' children’s Sunday school curriculum, the stewardship program 'Treasures of the Transformed Life,' The New Interpreter’s Dictionary of the Bible,
new youth resources, strong vacation Bible school offerings, etc., have
made notable contributions to our sales results, but not enough to
offset declines in some core existing products," Alexander said.
Alexander said the agency is working to control product and operating
costs, but the overall cost of producing resources is tracking upward
as a percentage of annual revenue.
"Still the hard reality is that the FY08 budget has no significant new revenue increases," he said.
"Our mandate is to publish and distribute quality Christian resources
our customers will choose, use and value for their ministries. We will
continue to pursue our charge vigorously while being good stewards of
the church’s resources. God leads and the church encourages so that we
will have the courage and imagination required for the journey forward."
*Gilbert is a United Methodist News Service news writer based in Nashville, Tenn.
News media contact: Kathy L. Gilbert, Nashville, Tenn., (615) 742-5470 or email@example.com.
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