In the last few quarters, three PM40 members have fallen off the chart due to bankruptcy: Smurfit-Stone, AbitibiBowater, and now, Caraustar. When one examines the assets, one comes to an interesting conclusion: for the grades they manufacture, none of the three would be considered to have the most obsolete equipment. Certainly none of them had the latest and greatest in all of their mills, but, overall, they were not universally the poorest operational performers.

We often focus on the execution of matters within the mill fence, but these three show us that what happens outside the mill: markets, poor acquisition deals, lack of system-wide efficiencies and so forth often are the critical matters, the ones which can determine the longevity and success of an enterprise.