Trump Is Coming: How Will Your In-plant Fare?

Though Michael Makin, president and CEO of Printing Industries of America, was optimistic that Donald J. Trump's election last week as the nation's 45th president was good news for the commercial printing industry, it's less certain how a Trump presidency will impact in-plants. Makin expected to see a reduction in government regulation and less invasive OSHA inspections, but in-plants are not as effected by these things.

Some managers feel that Trump's promised reductions in business taxes will bolster the economy, leading to improvements for everyone.

"The reduced business tax will hopefully encourage more investment in small business, and therefore the overall tax collected — business and sales tax — will go up, resulting in more funding for public institutions," predicts Drew Burgering, manager of Printing and Copying Services at Valdosta State University.

But while the promised tax cuts, both business and personal, will certainly bolster moods, they will come with a cost. (The non-partisan Committee for a Responsible Federal Budget estimates that Trump’s campaign proposals, like tax cuts and infrastructure spending, would increase the national debt by $5.3 trillion over the next decade.)

"There is a possibility that educational institutions will receive less funding," notes Ken Macro, former in-plant manager and current chair of the graphic communication program at Cal Poly, "thus requiring increased tuition, and inevitably lead to further cuts in non-essential services that require financial remuneration in the form of benefits and retirement from state-run systems."

Malkin's predicted boost to the commercial printing industry may not be good news for in-plants, Macro adds.

"I do believe that a Trump administration will provide enhanced opportunities for commercial print and graphic communication enterprises," he says, "which may tilt the bar of competitiveness either by removing work from the parent organization's in-plant or by providing more lucrative outsourcing options for the parent organization’s in-plant."

So in-plants had best make sure they are strategically aligned with their parent organization, he says, and embedded deeply in the organization's business.

Burgering notes that repealing the Affordable Care Act, as Trump has promised to do, could make it possible for him to employ a part-time employee for more hours per week without having to pay for mandatory health insurance. Currently, his part-timers can only work 19 hours per week.

Looking at Trump's trade reform platform and plans to bring jobs back to the U.S., Consultant Ray Chambers notes that those jobs originally migrated away from the U.S. to take advantage of lower labor costs in India, China, Mexico and other countries.

"To employ more U.S. workers, U.S. companies will be forced to raise prices," Chambers says. "And in order to remain competitive with offshore competition, we’ll have to impose tariffs — import taxes — which will, again, raise the price of goods sold in this country. Trump has already said that he would impose tariffs on Chinese goods of up to 45%.

"How does that affect in-plants? At this point we — the U.S. — lack production capacity for many, if not most, of the supplies and equipment in-plants use every day, so in the short term we will have little choice but to pay the higher prices. Initially we will see a spike in our operating costs. Many, if not most of our operating supplies — paper, toner, supplies, equipment — are produced off shore. If Trump imposes his tariffs, we will see dramatic near-term price increases in the things we need to do our jobs.  Colleges and universities, public sector organizations, non-profits and other organizations would all be affected, and organizations will be forced to prioritize and curtail what would otherwise be mission-critical activities.

"In the longer term, as organizations adapt to higher operating costs, I see a couple of scenarios. On the one hand, print volumes will decline as organizations struggle with higher supply and equipment costs, and in-plant managers will likely be faced with staff reductions. On the other hand, we may see an increase in Managed Print Services (MPS) and outsourcing activities as MPS providers will use these changes as justification for outsourcing print.

It's too soon to tell how Trump's plans will play out, but Burgering is taking a positive outlook.

"I just think the overall optimism for a better business climate will affect things as much if not more than what a Trump administration might actually do," he says. "If people feel good about the future, good things usually follow."