Los Angeles’ post-production community suffered a one-two punch this week as Technicolor confirmed it will shutter its North Hollywood release printing plant next year, while midsize vfx firm Asylum closed its doors for good.
On Thursday afternoon, Technicolor confirmed plans to close its North Hollywood release printing plant in the first half of 2011 and consolidate all North American release print operations in Mirabel, outside Montreal. Once that happens, Technicolor will no longer strike release prints in the U.S.
Technicolor will continue to provide all front-end, pre-release services, including dailies, in Los Angeles. Still, numerous layoffs are likely to result from the closure of the printing plant.
“The accelerating growth of digital technology plus our 2011 expiration of our lease at the North Hollywood location has caused us to reassess its cost structure in light of an anticipated decline in feature film volume requirements,” said a Technicolor spokesman. “With North American digital penetration now exceeding 30%, film print volume requirements do not require the operational capacity afforded by our two facilities, North Hollywood and Mirabel, for release printing.”
Technicolor recently lost its contract with Universal for release prints to rival Deluxe, putting further pressure on its bottom line (Daily Variety, Oct. 19).
Technicolor employees were sent home Thursday after being informed of the plan to shutter plant, though many were expected to be back on the job today.
As rumors of the Technicolor layoffs flew around Hollywood, the owner of Santa Monica-based visual effects studio Asylum, Nathan McGuinness, was dealing with the fallout from his company’s descent into bankruptcy.
McGuinness unleashed a broadside over the forces that forced him to close Asylum’s doors on Wednesday, even though it was booked to capacity with commercials and features and in prep for future work.
“We’ve been here 11 years. We had this artist-driven vfx company focused on quality work. We’ve had a very successful company, but as these last couple of years have gone by, we’ve found it increasingly difficult to compete because of runaway production and overseas tax incentives.”
Technicolor did not cite foreign competition as the reason for the closing of the North Hollywood plant.
Company would not address the issue of layoffs directly but said it has begun talks with its North Hollywood union reps “to review options to establish a cost-effective operation, given the state and trajectory of the film business. Any future action on our part will be contingent upon the outcome of those discussions.” Company also noted that it recently reached a union contract for workers at its Mirabel film lab.
Most union employees at the North Hollywood plant are repped by IATSE.
While Technicolor would not confirm the number of layoffs likely to result from the closing, Asylum’s McGuinness had to face about 100 employees who not only lost their jobs but are likely to go unpaid for their final week of work.
“Right now we’re just trying to figure out everything as best we can and leave with some type of integrity and some type of grace,” said McGuinness regretfully. “In my wildest dreams I never meant to hurt anyone with the closing of Asylum.”
Company has gone into bankruptcy and its assets will be liquidated.
McGuinness, an emigre from Australia, founded Asylum in 1999. “I came here thinking that this was the be-all and end-all, that this is where the best of the best come together to create excellence,” he said.
His company was a highly regarded mid-sized vfx studio. It’s recent credits included “Unstoppable” and “The Next Three Days.” McGuinness said the company was busy with commercials and features up until the moment he closed the doors.
McGuinness declined to name those projects and said his clients were unwinding their involvement with Asylum.
“We need to move on with some type of honor,” he said. “We did not damage any job that we were working on.”
In Asylum’s final days, McGuinness said, he was approached by larger companies that wanted to absorb Asylum, but he ultimately declined.
“I was so overwhelmed with the aspect of the bigger guys coming in and restructuring my company, I felt that was too sad for me to handle,” he said. “I felt that at the end of the day, it was better to let the artists make their choices and go where they need to go.”