By SARA FISHER
How exactly does a company manage to misplace 3,000 tons of newsprint?
That's not the wind-up for a joke. It's the question Times Mirror Co. executives currently find themselves trying to explain away.
While financial and personnel problems are familiar corporate ills, the inability to account for $1.8 million worth of paper is not. In fact, it's left a number of people in the newspaper industry scratching their heads.
"I'm not aware of anything like this having ever happened elsewhere," laughed newspaper analyst John Morton.
Misplacing that much paper is a bit of a feat. Newsprint travels directly from manufacturers to newspaper printing plants in one-ton rolls, usually via boxcar. The rolls are far too heavy to be casually stolen, and 3,000 of them would fill too many boxcars to easily slip through the cracks.
Vicki Cho Estrada, a spokeswoman for Times Mirror, confirmed that 3,000 tons of newsprint worth $1.8 million were not accounted for in fiscal 1998 still only constituting less than 1 percent of the 329,900 tons of newsprint the L.A. Times used in 1998, according to Editor & Publisher Co.
Estrada said the lost paper didn't have a material effect on Times Mirror's annual performance, so the loss wasn't disclosed on the company's annual report.
Times Mirror Chief Financial Officer Thomas Unterman said that news of the missing newsprint first reported in The New York Times had been taken out of context. He said the paper wasn't lost or stolen.
"There were accounting adjustments in inventory taken for the year-end audit," he said.
Unterman went on to suggest that the railroads were the culprits.
"Transportation logistics went way out of whack at the time of the Burlington Northern transaction." he said, referring to Burlington Northern railroad's takeover of competitor Santa Fe Pacific in 1995.
He also pointed a finger at Union Pacific Corp.'s near-total collapse of service last year, which ended up bringing most railroad service to the Western states to a near standstill.
"There was newsprint left lying on docks and stuck in transit," he added.
Unterman said the problem with the misplaced paper had been reconciled but he would not elaborate.
Representatives of Burlington Northern Santa Fe Pacific Corp. confirmed that some shipments to customers were delayed last year, but he could not say for how long. One executive said it sounded to him as if Times Mirror were laying too much blame on the railroad, especially considering that the Burlington merger happened four years ago. Any wrinkles in the system had been smoothed out far before the Times' paper incident, he said.
"We did experience some delays in 1998 related to a competitor's service difficulty," said Burlington spokeswoman Lena Kent. "But we rebounded to a 90 percent on-time performance."
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