Doing the right thing in business: Cox Enterprises finds new employer for left-behind workers
By Marc Gunther

[Editor: posted originally on CNN Money. "Left-behind workers" not to be confused with the Left Behind series of novels - don't get me started on their faulty theology.]

http://money.cnn.com/2006/12/26/news/companies/pluggedin_gunther_cox.fortune/index.htm

NEW YORK (Fortune) -- Here's an advertisement that is not often seen in the classifieds:

Wanted: New employer for 300-plus experienced workers. Production facility included. If your company has a need to expand operations in the near future, we have the perfect opportunity for you.

Cox Target Media, a division of privately held media giant Cox Enterprises, took out that ad after the company decided to close a factory in Elm City, North Carolina. "We want to preserve the jobs for our North Carolina employees," the ad went on to say, "and we're willing to be creative to make this happen."

You may not know Cox Target Media, but chances are that you know its main product, a blue envelope filled with coupons mailed out once a month under the Valpak brand. This year, the company will stuff more than 18 billion offers from advertisers into more than 500 million envelopes and then mail them to 45 million households in the United States, Canada and Puerto Rico.

Yes, it's a big operation. And despite what you've read about the decline of print media, it's doing fine - Cox is leaving Elm City because it plans to consolidate its printing and mailing operations in a new, high-tech facility in Florida, at a cost of about $200 million.

Before we go on with the Valpak story, a bit of context: There's lots of debate about layoffs and globalization, as jobs move from one place to another or one industry to another. The economist Joseph Schumpeter famously called this "creative destruction," and it can't be stopped. But that doesn't mean companies cannot take responsibility for people who are left behind when dislocations occur. They can.

That's what Cox Target Media did. One of Cox Enterprises' values is that "our employees are our most important resource." Every company says that. But Cox acted on it, at least in this instance.

"We know all these people," explained Bill Disbrow, president and CEO of Cox Target Media. "Through no fault of their own, we had come up with what we thought was a much better way to run our business, for our customers and our shareholders. Yet you had this group of folks up there who had done a great job for us for a long time.... We at least had to make the best effort we possibly could."

When Cox decided to close down the Elm City plant in 2004, it employed about 440 people there. Most were not going to move to Florida; in any event, there wouldn't be jobs for all of them because the new automated plant needs fewer workers.

So Disbrow assigned a vice president to find a buyer for the Elm City plant. Cox took out ads, sent out sales brochures to about 200 firms and spread the word through the Winterberry Group, a consulting firm, and Petsky Prunier, an investment bank that specializes in direct marketing.

The consultants found IWCO Direct, a direct mail company based in Chanhassen, Minnesota. It looked at first like the two firms might be out of sync. "They needed the plant earlier than we wanted to get rid of it," Disbrow said. But earlier this year, they reached an agreement.

Elm City's workers will remain employed by Cox until next fall when most will go to work for IWCO Direct. None are guaranteed jobs, but both companies say their skills are a big reason why IWCO made the deal. IWCO says it will invest $18.9 million in the plant, and add another 100 jobs. The buyer is getting about $750,000 in state and county aid.

I asked Disbrow if there was a business reason why Cox took the trouble to save 400 jobs. "As much as anything," he told me, "it's about the folks who are staying. They can see how we treat people. And they are going to be with us long-term."

Long-term thinking may be a key to this story. Atlanta-based Cox Enterprises is 108 years old. (The founder was James M. Cox, a reporter who purchased the Dayton Evening News, became Ohio's governor and the 1920 Democratic presidential nominee.)

As a privately-held firm, Cox doesn't have to chase quarterly earnings; it can invest for the future. It has adapted over the years to new technologies - radio, TV and then cable, where its division had a reputation for being more customer-friendly than other operators. The parent company offers employees a pension plan, a 401-k plan and health insurance. It tries to be green as well, giving preferential parking at its headquarters to hybrid cars and encouraging executives to buy fuel-efficient vehicles.

Here's what a friend of mine who has worked for Cox Newspapers for 22 years told me, via e-mail, when I asked him about the company:

Cox has been a place that values its employees, cares about our individual career aspirations and looks after our families. At a time when many newspapers around the country are slashing reporting staffs - in the newsroom and in bureaus - the emphasis at Cox is on turning to reporters to help find new ways to serve our readers, through the Internet, for example....The message from Cox is: that's better for the company over the long run than threatening to put seasoned reporters out on the street.
I'm ordinarily no fan of junk mail. But next time one of those blue Valpak envelopes arrives at my door, I'm going to open it up and see what's inside.