Goss Holdings, Inc.

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Goss Holdings, Inc.

700 Oakmont Lane
Westmont, Illinois 60559-5546
U.S.A.
Telephone: (630) 850-5600
Fax: (630) 850-6310
Web site:http://www.gossgraphic.com

Private Company
Incorporated: 1885 as Goss Printing Press Company
Employees: 2,500
Sales: $600 million (2000 est.)
NAIC: 333293 Printing Machinery and Equipment Manufacturing

Goss Holdings, Inc., through its Goss Graphic Systems subsidiary, brings the written word in myriad form to readers around the world. Dominating North America’s manufacture and distribution of web offset printing, Goss presses are the backbone of many internationally renowned newspapers including the Chicago Tribune, Los Angeles Times, Miami Herald, New York Times, USA Today, Wall Street Journal, the United Kingdom’s Financial Times, Brazil’s Zero Hora, China’s People’s Daily, Japan’s Yomiuri Shimbun, and Norway’s Adresseavisen. Additionally, Goss is a major force in the production of advertising inserts, controlling nearly three-quarters of that market. In 2000, the company emerged from Chapter 11 bankruptcy protection, battered though by no means beaten.

In the Beginning: 1885-92

Four years after the 1871 fire that devastated Chicago, a small printing company was established by brothers Samuel and Frederick Goss, and their primary financial backer, Jacob Walser, who provided working capital of $100,000 for the startup. Two others played a role in the formation of the company, Benjamin Babcock, who published periodicals locally, and attorney David Alland, who was representing Babcock’s wife (who contributed $25,000 to the newly chartered company). The basis for the company was to design, build, and sell printing presses, and the Goss brothers had already built their first prototype, called the “Clipper,” a variation on a two-color printing press. Sam and Fred had found a way for the press to print on both sides of paper simultaneously by reversing one of its cylinders.

Though the small company secured orders for the Clipper press, its first few years were fraught with problems, including a fire that destroyed the manufacturing site and damaged two presses. Fred, Sam, and Jacob were undeterred and moved to new office and manufacturing space at the corner of Clinton Street and Jackson Boulevard. By this time, the Babcocks and David Alland had sold their shares back to Walser and the Gosses, and another person had come to Chicago to join the fledgling company. William “Peanuts” Goss, who also worked in the printing business, joined his older brothers and became Goss Printing Press Company’s general superintendent, with Fred continuing in sales, Sam as chief designer, and Jacob as president and treasurer.

Within the next few years, Goss made a name for itself in the evolving printing industry, which had long been dominated by three companies: R. Hoe & Company, Walter Scott & Company, and Duplex Printing Press Company. Though the company’s chief rivals were located outside Illinois, each had an office in Chicago and had secured prominent clients within the city. After weathering its first four years, Goss initiated plans to move to a larger facility in 1889. The next year the company bought 20,000 square feet of land on Rebecca Street (later Sixteenth Street) and built a two-story structure with ample room for manufacturing and management offices. The company officially began operation at 335-351 Rebecca Street in 1891, and remained there for the next six decades (which included 11 subsequent renovations and additions).

By 1892 Goss was gaining respect in the printing press business, but an inventor named Joseph L. Firm would soon give the company the impetus needed to best its competitors. Firm had been working on a new press for years and had received little support or respect from the industry; in fact, he was ignored and maligned. But Fred thought otherwise and invited Firm to Chicago to meet with Sam and Jacob. The Goss company then offered Firm ten annual payments of $2,500 for the rights and title to his invention, as well as a 10 percent royalty from any and all presses resulting from his original design. Firm’s two-deck design became the basis for the Goss Straightline Newspaper Perfecting Press, which debuted in 1892. The Straightline press was faster and better designed than traditional presses and many newspaper producers took notice. But less than a year after the Straightlines were built and sold, Walter Scott’s presses were rumored to have the same straight-lined design and had been attracting big sales.

Patents and Their Worth: 1893 to 1910

In 1893 the World’s Columbian Exposition was held in Chicago and both the Clipper and Straightline presses were exhibited alongside rival machinery, including presses from Walter Scott & Company. Both Goss presses were award winners, testament to the young company’s growing foothold in the industry. Yet part of Goss Printing Press Company’s future was riding on the legal status of a Scott press, allegedly an imitation of a Goss Straightline press. Because Firm had patented his design, the Gosses and Walser felt they had the law on their side. They first wrote to Walter Scott, asking him to desist from using the trademarked technology, hoping to settle the matter outside the courts. After no favorable response or resolution, attorney Charles Pickard was hired to file a patent infringement suit against Scott in New Jersey federal court. The suit, filed in 1895, was resolved two years later when the judge sided with Scott, believing the newer press innovations were a natural progression of design and not from the patented work of Joseph Firm.

Disheartened, the Gosses and Walser were nevertheless determined to appeal, despite increasing financial hardship. Another of the Goss company’s competitors, R. Hoe & Company, had jumped into the fray with an offer after the initial court proceedings went against Goss—Hoe’s management offered to buy Firm’s patent rights. Though certainly in need of funds, but still believing the validity of their claims would be upheld in court, the Gosses and Walser declined to sell outright, but did approve licensing rights for $125,000 to Hoe & Company. The cash infusion helped defray costs, legal and otherwise, but as the courtroom wrangling continued, Goss employees and shareholders began to have doubts about the company’s fate. Then Hoe tendered an offer to acquire the company, and believing Goss Printing Press Company’s future was in serious jeopardy, its principals decided to sell for $1.5 million.

Luckily for Goss and to the detriment of both Scott and Hoe, the U.S. Court of Appeals in Philadelphia overturned the lower court’s decision and found in favor of Goss. The opinion reaffirmed that the press improvements were indeed from Firm’s trademarked designs, and ordered Walter Scott & Company to not only stop manufacturing such presses but to give Goss a financial statement and restitution for all sales and profits made from the pirated innovations. The Goss brothers and Walser were thrilled with the ruling and thankful that Hoe & Company had found their selling price too steep—they now set out to prove to the printing industry just how valuable their company and its products could be.

By 1897 there were 125 variations of the Straightline press in use; ten of these were sold to printers in Canada, and another was sold to Cuba. Customers gave glowing testimonials and salesman Fred was quick to use them to sell presses to new clients throughout North America and beyond. Among the newspapers printed on Goss Straightline presses were Providence, Rhode Island’s Evening and Sunday Telegram, the Kansas City (Missouri) World, Chicago Journal, Detroit Free Press, and New York Tribune. The next year the company scored its first major overseas order, selling and installing a Straightline press for Dublin’s Irish Daily Independent. This was followed by a sale in Glasgow, Scotland, and similar receptions as Goss presses were introduced to the European continent. Within the next several years international demand from the United Kingdom, Australia, Chile, France, Holland, Italy, New Zealand, South Africa, and other countries grew at such a fast pace that Goss opened a manufacturing plant in Middlesex, England, in 1910 under the name of the Goss Printing Press Company of England, Limited.

Unprecedented Growth: 1911-28

While Goss Printing Press Company continued designing presses and improving them, the company had earned a reputation for excellence as Straightline presses became the pride of newspaper producers. Many Goss clients were so fond of their presses that the machines were prominently featured in their product advertisements, essentially giving Goss free advertising. Yet the company was shaken by the successive deaths of William in 1912, Jacob in 1913, and Fred in 1914. As the Chicago-based operation tried to cope with the deaths, the U.K. operation was falling apart. Despite some wartime manufacturing in early World War I, the Goss Printing Press Company of England suffered from poor management and the building and land were sold in 1916.

Throughout this dark period, the company carried on, in part due to Joseph Walser, Jacob’s son, who had taken over for William in production and engineering. New presses and industry firsts were introduced, including the Flying Cam folder, the Semi-Rotary Press, and the “Comet”; then the company turned to producing gun mounts for the Navy after the U.S. entered World War I in 1917. After the war ended, Goss received a letter of commendation in 1918 from Franklin D. Roosevelt, then the assistant Secretary of the Navy. This year also marked the retirement of Sam Goss from the company.

Company Perspectives:

At Goss Graphic Systems, we aspire to be valued by our customers as true business partners, providing superior products and services that not only meet but anticipate their needs.

We constantly seek out the best talent, the freshest ideas, and the newest technologies to assure that our customers have a competitive edge. And we assure the highest quality in every product, part and service we deliver.

The original founders of Goss Printing Press Company were now gone. Albert “Bert” Eddy, selected by Sam Goss as his successor, was running the company when the Chicago Tribune’s Robert McCormack chose Goss presses to revitalize his newspaper’s production. The results were stellar and the basis for a long and prosperous relationship for both parties. Sales and profits were excellent, yet trouble loomed on the horizon and arrived after Joseph Walser’s death in January 1921. For the next several years the board of directors was controlled by Eddy, and discord grew among some of the company’s management and Goss and Walser heirs. Three young men, however, came to the fore—Robert “Hook” Corbett, Joseph Riggs, and Curtis Crafts—and each had a profound effect on the company’s future.

The Great Depression and Beyond: 1929-59

Though Bert Eddy had believed 1929 would be a great year for Goss, the collapse of Wall Street and the onset of the Great Depression put the company in peril. Corbett, Riggs, and Crafts bristled under Eddy’s leadership, particularly his refusal to allow the building of a new prototype designed by Crafts or to consider moving to a single-story premises outside of Chicago. The three younger men eventually prevailed and scaled back Eddy’s influence, only to find Goss sitting idle in 1933 with neither orders nor repair work to Generale badly needed funds. Yet the inauguration of Franklin Roosevelt and implementation of his New Deal policies helped stabilize the printing industry, enough so that Crafts built his newfangled “anti-friction” press. The success or failure of the Anti-Friction Press meant either the resurgence of Goss or its demise; luckily for everyone involved the new press was a hit.

In addition to Crafts’ accomplishment, Goss further reestablished itself in England where the company slowly rebuilt its reputation after selling off its Middlesex plant. After buying and renovating the printing operations of Joseph Foster & Sons outside London, Goss-Foster Limited was in business. Like its antecedent, the U.K. operation ran into problems, primarily personality conflicts and organizational disarray; also like its forerunner, another world war turned production to armaments. The same occurred in the Chicago manufacturing plant, when Goss once again worked on weaponry for the U.S. Navy.

After the conclusion of World War II, Goss went back to printing press design and the latest technological coup came with the introduction of the Goss Headliner Press, hailed by many as the “Press of the Future.” The 18-ton Headliner presses were soon put into service at the nearby Chicago Tribune, and became the press of choice for many in the industry. Soon Goss management heard that rival Duplex Press Company, based in Battle Creek, Michigan, had fallen on hard times after completing wartime production and was nearing bankruptcy. Desperately in need of additional manufacturing space, Goss made a successful offer for Duplex and moved production of smaller press units to the Michigan facility.

In the 1950s the company continued expanding both domestically and overseas; the Battle Creek facility had been sold and operations moved to a 20-acre stretch of land in Cicero, Illinois, outside Chicago. Among the growing who’s who of clients printing their newspapers on Goss equipment were the Birmingham, Alabama’s News and Age-Herald, Minneapolis, Minnesota’s Star-Journal and Tribune, the New York Daily News, Chicago Tribune, Chicago Sun-Times, and both the Melbourne Herald and the Sydney Sun in Australia. The company’s good fortunes, however, had drawbacks as well: there were internal squabbles over stock, including some members’ insistence on a public offering, and the growing fear that an outsider could acquire enough stock for a takeover attempt. To save Goss from being swallowed by a company with no interest other than profit, it was merged with another like-minded leader in the industry and renamed Miehle-Goss-Dexter, Inc. in 1957.

After the Merger: 1960s

Miehle-Goss-Dexter Inc. (MGD) became the world’s largest manufacturer of printing presses and graphic arts equipment. During the 1960s came the company’s first web offset press, the Suburban, developed at a new plant in Rockford, Illinois. The first Suburban order came from the St. Louis Daily Record, and others soon followed. The popularity of the web offset presses pushed Headliner presses somewhat into the background, though they were still in widespread use and had lured in more big-name clients, including the New York Times. Demand for the offset presses, though, was swift and plans were quickly underway to build a huge plant in Cedar Rapids, Iowa. The new $7 million manufacturing facility began filling orders in 1965 for newspaper producers in the United States, Canada, Europe, and South America.

Key Dates:

1885:: Goss Printing Press Company is officially chartered in Chicago, Illinois, by Fred and Sam Goss, and Jacob Walser.
1891:: New manufacturing facility on Rebecca Street opens.
1898:: Company completes its first major European sale, to Dublin’s Irish Independent Press.
1910:: Goss opens its first international plant, in Middlesex, England.
1912:: William “Peanuts” Goss dies; Joseph Walser joins company.
1913:: Jacob Walser dies.
1914:: Fred Goss dies.
1916:: Middlesex plant is closed and sold.
1922:: Sam Goss, last of the original founders, dies.
1957:: Following a merger, company is renamed Miehle-Goss-Dexter Inc.
1969:: Another merger, with North American Rockwell, leads to the new name MGD Graphics Systems.
1985:: Goss business celebrates its centennial.
1996:: Rockwell sells off the MGD Graphics Systems division to a New York investment firm, which retains a controlling interest; company is renamed Goss Graphic Systems, Inc.
1999:: Company files for bankruptcy protection and reorganization.
2000:: Goss emerges from Chapter 11 protection with strong sales.

Miehle-Goss-Dexter’s next innovation was a fully-automated magazine press, first ordered by Reader’s Digest and capable of printing up to 140 pages at a time. While MGD was thriving in the last years of the 1960s, even having made it onto the Fortune 500 list of top industrial companies at number 461, old foes had failed: both Walter Scott & Company and R. Hoe & Company had succumbed to hard times and had been swallowed by Wood Industries. Sales for MGD in 1968 had reached $154 million, and the company was riding high enough to once again find itself ripe for a merger or an outright acquisition.

Just such a scenario surfaced in 1968 when North American Rockwell, the aerospace and automotive company, indicated its interest in MGD. The initial discussions went nowhere until Rockwell executives announced they had bought up a considerable amount of MGD stock and were prepared to offer $31 a share to acquire a controlling interest. MGD management was surprised and dismayed; they had no thoughts of merging or being taken over and suddenly several other suitors came out of the woodwork to acquire the company. In 1969 MGD’s board finally relented and chose Rockwell, which had upped its share price and seemed, at least to some, the lesser of the evils trying to corral the company. The merger’s good news was the deep pockets Rockwell had available for expansion; Miehle-Goss-Dexter was reborn as MGD Graphics Systems of North American Rockwell.

Part of Rockwell: 1970s-80s

After the merger, the new division had its ups and downs, as did Rockwell. In 1973 North American Rockwell became Rockwell International to better represent its evolving global presence, and two years later was embroiled in a messy strike by members of the International Association of Machinists and Aerospace Workers, which precipitated the sale of the Cicero plant and leasing part of the premises back to Rockwell. Despite minor setbacks, the MGD Graphics division carried on, making improvements on its many presses and keeping such influential customers as the New York Tribune happy.

In 1982 and again in 1985 the division was restructured, segmenting into newspaper, commercial, and international units. Technology was also pushed to the forefront, and CAD/CAM (computer-aided design and computer-aided manufacturing) had been introduced. The first machine produced using the CAD/CAM system was the Headliner Offset, which was quickly assimilated into the industry and the first installed in Gainesville, Florida, to produce the Gainesville Sun (owned by the New York Times) and then put into use by the Los Angeles Times and London’s Daily Telegraph. Nearby Chicago Tribune, one of the Goss company’s longtime customers, built a state-of-the-art facility called the Freedom Center, equipped with over $77 million worth of offset printers bought from MGD. Several other world-renowned papers, including the Wall Street Journal and the new USA Today, were also printed on MGD machinery.

Reversals & Renewals: 1990s and Beyond

The MGD Graphics Systems division, though never exactly homogeneous with the rest of Rockwell International’s operations, coexisted to mutual profit until the mid-1990s when rumors began circulating about the division’s falling sales. The rumors were never confirmed, however, and 1995 year-end revenues seemed healthy at $700 million, with an operating profit of $66 million. Yet at the January 1996 Newspaper Association of America’s Publishers Convention, Rockwell publicly announced its intention to sell off the graphics division for $600 million to a New York investment firm created by Stonington Partners Inc., which would own a controlling interest. The small company founded by Sam and Fred Goss and Jacob Walser was back: not only in name as Goss Graphic Systems, Inc., but as an independent company once again.

In 1997 Goss brought out the first printing press combining the old and the new—using conventional offset lithography with digital imaging. This press, called ADOPT/CP (Advanced Digital Offset Printing Technologies/Concept Press) was the next in the Goss company’s long line of technological firsts and was expected to set another standard for the industry. Yet in the late 1990s all was not smooth sailing, despite its roster of loyal customers and leading edge technology. The venerable company filed for Chapter 11 protection in 1999 and restructured to save the Goss name.

Like a cat with nine lives, Goss Graphic Systems emerged from bankruptcy protection and began clawing its way back to the top. The company’s stellar reputation in both production and service withstood its precarious financial position and the orders continued to come in. Its difficulties were actually a testament to the durability of its own products; its presses lasted so long the only reason clients replaced them was for new technological advances, and older presses were usually sold and kept in use elsewhere. Given that replacement of a press generally ran every quarter-century, repeat business in the printing industry was rather slow. Nevertheless, by the end of 2000, Goss had announced solid financial results, including higher orders both domestically and overseas (including orders for newspaper production in Korea, Puerto Rico, and Turkey), as well as increases in cash flow and margins. Goss Graphic Systems, once again, was in good shape and poised to lead the industry in the next century.