Home > Our World > News > News Archives by Date > News Archive 2007 > July 2007 > News - July 2007
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 said.

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 activities.

"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 newsdesk@umcom.org.

Related Articles

Publishing House adapts to market changes

Board hears success stories from Publishing House

Video series teaches 'God is a great big God'

Resources

United Methodist Publishing House

Cokesbury


Ask Now

This will not reach a local church, district or conference office. InfoServ* staff will answer your question, or direct it to someone who can provide information and/or resources.

Phone
(optional)

*InfoServ ( about ) is a ministry of United Methodist Communications located in Nashville, Tennessee, USA. 1-800-251-8140

Not receiving a reply?
Your Spam Blocker might not recognize our email address. Add this address to your list of approved senders.

Would you like to ask any questions about this story?ASK US NOW

Original text