Offshoring and the Global Marketplace

At Time Warner Book Group, the majority of children's titles are produced offshore as well, as are most coffee-table, lifestyle and art books, says Milton Batalion, senior vice president of production and manufacturing for Time Warner Book Group. "We also occasionally print four-color adult trade books overseas if we have the time," he says, noting that the extra time involved is usually around six to eight weeks.

Batalion says that for Time Warner's products, a number of major benefits support the cause for printing in Asia and Europe. "We require press proofs, and it's very expensive to pull press proofs in the United States. … Another benefit of printing in Europe is the quality. There is a great printing tradition in Europe. You almost can't find that level of craftsmanship here in the U.S., and if you can, it is so astronomically expensive," he explains. "And, there is a much larger choice of printers available in the Far East and Europe than in the U.S."

The cost savings is not often refuted by U.S. printers. "Regarding the four-color, juvenile market, the publishers [who report cost savings] are correct. You cannot get competitive pricing from U.S. manufacturers for several reasons: currency, wages and working conditions, and the environment," says Chuck Nason, president, Worzalla Publishing Company, a book manufacturer in Stevens Point, Wis.

Global strategy and technology consulting firm Booz Allen Hamilton explains in its white paper, "Business Process Offshoring," that "offshoring is driven by the dramatic wage-cost differential between Western 'onshore' economies and the economies of South and Southeast Asia, and Eastern Europe. Labor savings alone—depending on the nature of the work and the skill level required—range from 40 percent to 70 percent."

But Ken Coburn, a print broker with 45 years of experience in the industry in the United States and abroad, says that more is involved than wages. "What is generally not understood is that the lower cost of many products offshore is not directly tied to labor rates."