Many questions surround Lexmark in Canada

Last week as the CDN team was putting the finishing touches on the print issue featuring 20 Women IT executives in the channel, a trusted source of mine told me that Lexmark Canada was not paying back end rebates to a channel partner.

CDN is not reporting that Lexmark is failing to pay its reseller partners. We do not have any credible information that this is the case. What I would like to convey in this blog is just a summary of events that transpired during my chase to find out more about Lexmark and how it operates in Canada.

Like I said, CDN was on print production deadline and so we needed to make a quick decision to devote some time to chasing down this story or wait for tomorrow. We decided to chase it down.

One of our staff members found out from a reliable source in the printer industry that Lexmark was going to shut down operations in Canada. A Google search later found that several well-respected news organizations such as reported Lexmark would be part of a leveraged buyout. No suitor was named.

My next move was to call one of my sources in the printer industry. This source said that Lexmark Canada has been shutting down for the past two months. This is all the source could tell me. This information, while dramatic, did not tell us much. But, we had two credible sources and it was time to call someone from Lexmark Canada.

I called Mark McCullough, marketing manager for Lexmark Canada Inc., based in Richmond Hill, Ont.

I managed to get him live on his cell phone. I told him what the two sources said. McCullough said to me that he hadn’t heard anything pertaining to Lexmark shutting down operations in Canada. I then asked him point blank if Lexmark was shutting down operations in Canada. McCullough repeated that he did not know and then said: I cannot confirm nor deny that Lexmark was shutting down operations in Canada.

By saying this, McCullough affirmed in my mind that I was on the right track.

I then proceeded to ask him about the non-payment of back end rebates for partners. McCullough said that Lexmark Canada has a great relationship with the reseller community and will continue to enjoy those relationships. This is what they call a “motherhood statement” in journalism. It sounds nice but doesn’t really mean anything.

Finally, I asked him if he was going into work the next day. McCullough said he was planning on going to work and for him it was business as usual.

Even though I was on the right track, I still did not have anything concrete. I decided to call on other sources close to Lexmark Canada. Then my second printer industry source contacted me again to let me know that some other smaller dealers have not been paid any back end rebates. This source added that it’s typical of a leverage buyout candidate to operating this way. And, Lexmark did close factories in Mexico, according to those news sources.

As more sources came in saying they knew nothing, McCullough called back and asked if he could change his original statement to a “No comment.”

He then provided me the name of Jerry Grasso, a communications person at Lexmark headquartered in Lexington, Kentucky.

I called him and told him what CDN had learned. Grasso’s response was that it’s Lexmark’s policy to not comment on rumour and speculation.

So then I asked Grasso a direct question: Is Lexmark shutting down operations in Canada or planning to shut down operations in Canada? Grasso’s response was “Lexmark will not comment on rumour or speculation.”

A debate started between me and Grasso. It’s my belief that I’m asking a direct question to which a simple yes or no answer is required. Grasso told me that my question is based on sources and therefore is rumour and speculation.

Grasso would not confirm that Lexmark Canada employs 200 people. Grasso was also unwilling to answer if Lexmark was currently operating in Canada saying he’d never been to Canada and did not know the answer. While I think Grasso could have answered my direct question to be fair if he doesn’t know I have to accept it.

At the end of the day I do not wish to embarrass Lexmark in any way. I realize that this blog entry might just do that. CDN did not publish a story because we did not get proper attribution on if they were leaving Canada and failing to pay back end rebates. I’m not sure what is really going on at Lexmark, the No. 2 brand in the printer market place. Like I said earlier, I am writing this blog as just a transcript of events that occurred on Wednesday, April 7, 2010.

I sure hope Lexmark continues to operate in Canada. I think the market place and the channel really needs a strong, valued brand like Lexmark.

My only wish is that someone from Lexmark would say unequivocably that Lexmark will continue to operate and service the market place in Canada today and well into the future.

Two quick hits before I go. The return of Alvina Usher. Usher is working at Manage Your in Ottawa. She will be working on a charitable event bringing IT to Kids. CDN wishes her the very best.

HP is in hiring mode for sure. It has appointed Thomas E. Hogan as executive vice president of sales, marketing and strategy for HP Enterprise Business. HP also announced that Francesco Serafini will become executive vice president of Emerging Markets, Jan Zadak will replace Serafini as senior vice president and managing director for HP EMEA. HP did not stop there: Richard T. Geraffo Jr. is leaving VMware to be HP’s senior vice president and managing director for the Americas. Finally, Doraisamy Balu, senior vice president and managing director, HP Asia Pacific and Japan is retiring. Piau Phang Foo, director of HP China will replace Balu.

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