Book manufacturer Thomson-Shore is adapting and rebounding

Worsening the grim outlook were monumental shifts under way in the publishing world, threatening the company’s core product: bound books with black type on white pages, made by conventional lithography. More publishers sought “print-on-demand” services for short-run titles to avoid piles of unsold inventory.

As Spall and his management team saw it, the firm could adapt to the changing marketplace or face decline. They opted to introduce new digital services while enhancing offerings in their traditional niche of short- and medium-size print runs, typically 1,000 to 1,500 books.

The company, one of a half-dozen book manufacturers still in the Ann Arbor area, undertook $14 million in capital investments that included $10 million in previously-approved state economic development loans.

It installed a digital print center to gain business in the print-on-demand market, where publishers can request print runs as small as a single copy to fulfill an Amazon order. It added color capabilities to make fancier titles and children’s books. And it began offering conversions from print to e-book format for Kindles, Nooks and the Sony eReader.

Thomson-Shore’s decisions appear to be paying off. Spall said the company’s annual revenues of about $35.5 million are back to pre-recession levels. The firm’s employee count, although still just under 200, is growing.

Yet despite its investments in software and digital imaging equipment, the company says it still makes most of its money through traditional lithography.

Thomson-Shore has added new accounts to its customer base of religious and university presses and a list of publishers, which includes Random House. This fall, it became the preferred U.S. book manufacturer for U.K.-based Bloomsbury Publishing. It is also the favorite book manufacturer of San Francisco-based McSweeney’s.

“We expect to see double-digit growth next year,” Spall said in an interview last week inside the firm’s 180,000-square-foot headquarters and factory in rural Washtenaw County just outside of Dexter. “It’s ironic that a lot of that bright expectation is a result of the recession, because we had to reinvent ourselves.”

But Thomson-Shore must work harder today for its money than a decade ago. The company once did 400 to 500 jobs a month to get the current revenue numbers, Spall said. Now it does nearly 1,500 jobs a month. “We’ve really had to change the way we do business,” he said.

The company was started in 1972 by Ned Thomson and Harry Shore, who quit jobs at the former Braun & Brumfield (now a part of Sheridan Books). The men ran the business with a profit-sharing program and transitioned to an employee ownership model by the mid-1980s. Thomson retired long ago and sits on the company’s board.

“The (employee ownership) culture here is very much supportive of change, as long as they understand why the change is occurring,” said Spall, who arrived as CEO in September 2008 from the New York office of print company RR Donnelley.

For a low-tech product — the book — Thomson-Shore’s factory is a sprawling wonder of computerized mechanization. The lithography process begins with a laser that etches images and words onto an aluminum plate. Giant spools of paper are loaded into a second machine as ink rollers transfer ink onto the plate and a rubber blanket, which in turn transfers the images to the paper as it unspools at 800 feet per minute. The paper is cut into pages, compressed and then bundled by robots.

An array of machines then sews the pages and glues the binding. From start to finish, it takes about 20 hours to manufacture a run of about 1,500 books. The new digital print machines skip the aluminum plates and produce more modest book runs of 1 to 500. Traditional lithography still produces higher-quality books, but digital is catching up fast.

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