Crane's Stationery Operations to Become Employee-Owned
NORTH ADAMS, Mass. — Crane & Co.'s Stationery Division will become a separate entity owned by its management team and employees by the end of the year.
The announcement was made to employees at the Curran Highway plant by Crane Stationery President Katie Lacey on Wednesday. The company was holding the public announcement until all the employees and customers could be notified.
"This marks the continuation of Crane Stationery's commitment to our employees, our retailers and our industry. I am excited to be working with our employees to write the next chapter of a company with such a strong American heritage," Lacey said in a statement. "I would like to thank Crane for its leadership and support as we have executed our new strategy."
No changes were expected to occur because of the restructuring, which was led by the division's management team. As of September, the company had 271 full-time employees and 32 temporary. The Crane name will remain in place.
In a letter to employees, Crane & Co. CEO Stephen DeFalco said Crane had entered into talks with "interested parties" over the last year to find ways for Stationery to pursue new avenues.
"None of these discussions led to an opportunity that would ensure your team could continue to execute on its strategy," he wrote. "We then decided to explore structuring the division under current employee ownership."
The talks were kept very quiet, he said, and the decision was made by a unanimous vote by the board of directors.
"It's the same management team based in North Adams. There is an office in New York, we'll maintain that, and a small office in Kennebunkport [Maine]," said Crane spokesman Craig Conrad.
The management buyout of the division completes what Crane officials are calling a "strategic repositioning of Crane into a company with a singular focus on its rapidly growing global currency business."
The company sold its Technical Material Division for $72 million last year to Neenah Paper Inc., which included two mills in Pittsfield. Excelsior Printing had been sold 10 years ago.
The divestments leave the company's core currency operations, with headquarters in Dalton, which has been making acquisitions over the past 15 years to support that division. Crane makes the materials for U.S. and other paper currencies. According to company officials, the currency division is the fastest growing in its industry with more than half its revenue coming from outside the United States.
The stationery business, by contrast, accounted for only 10 percent of its revenues.
Still, Conrad said stationery has been very successful in the last few years. The company had initially looked to consolidate its facilities in 2009, threatening North County with the loss of 200 jobs. Since then, it has expanded its operations in North Adams and added William Arthur and Vera Wang Fine Papers in 2012.
Crane has been producing fine, 100 percent cotton stationery paper since 1801.
"There's no overlap of the currency business ... They can better control their own destiny and build on the successes they have had. They've seen remarkable success," Conrad said. "I think it's good news for North Adams."
DeFalco's letter noted some of the corporation's policies were actually weighing on Stationery's finances even though it essentially operated as a separate company.
"These businesses had separate workforces, no supplier overlap, no customer overlap, separate manufacturing locations, and distinct IT systems. In fact, over time, there were Crane policies (security, benefits, etc.) that were raising the cost structure in Stationery and making it harder to compete, " he wrote. "In essence, Crane had taken Stationery as far as possible and it was concluded that an alternate ownership structure would better help the business continue on its path to success."
Mayor Richard Alcombright said he had been informed of the changes in management Wednesday afternoon and would be meeting with Lacey to review what it means for employees. The workers will get an ownership stake with vested milestones, according to Crane.
"I want to make certain that the employees have a reasonable avenue to that equity," he said.
There's also a question of how the special tax assessment given to the company will transfer; the four-year graduated exemption on taxes was provided to ease Crane's acquisition of William Arthur in 2012. It has another year or two to run and is contingent upon the Stationery Division keeping a required number of employees.
"My thought is this, even more so than before, that we have to make sure that agreement stays in place," said Alcombright. "It gives the employees time to have this agreement work."
The mayor thought the change would be beneficial to the company's ability to pursue avenues that the larger Crane corporation might not.
"It can actually strengthen them down the road," he said.
Crane Stationery products are sold by more than 1,000 independent retailers domestically and abroad. Its headquarters is in New York City and a number of designers from the William Arthur line are continuing to work in Kennebunkport.
"We thank all the Crane Stationery employees who worked to build this business and wish them the best of success in the future," said Stephen P. DeFalco, Crane's chief executive officer. "We expect as a focused company it will continue to grow and prosper."
Updated at 9:31 a.m. with information form CEO Stephen P. DeFalco's letter to employees.
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