Less than 24 hours after members of the 111th Congress were sworn into office, NAHB launched an all-out effort to make housing a centerpiece of the massive economic stimulus package that lawmakers are expected to complete by mid-February.

More than 80 builders from across the country converged on Capitol Hill on Jan. 7 to meet with the congressional leadership and key members of the banking and tax writing committees to convey the message that a housing stimulus is urgently needed and that restoring demand for housing is the fastest and most effective way of reviving the economy.
The key ingredients to the recovery plan call for Congress to support enhancements to the home buyer tax credit, to provide below-market interest rates on 30-year fixed-rate mortgages and to continue foreclosure prevention measures such as those advocated by Federal Deposit Insurance Corporation Chairman Sheila Bair.

Underscoring the urgency of the situation, in a briefing to builders before their meetings with lawmakers, NAHB Chairman Sandy Dunn said: “Our industry stands at a crossroads and our efforts here today are vital to the housing industry’s ability to weather this storm and come out the other side healthy and in a position to grow.”
Dunn urged builders to share their personal stories with their congressmen. “Tell them how many of you have had to lay off family members and long-time employees. Congress must understand that housing is central to the economic crisis, that housing has led our nation out of past recessions and that it can do so again.”

NAHB President and CEO Jerry Howard stressed that NAHB, as leader of the Fix Housing First coalition — which consists of more than 600 organizations, home building companies and manufacturers, including NAWLA — was marching to Capitol Hill to show a united front.

“The message we are sending to Congress — there are no large builders, no small builders, no low-income builders, no suppliers and no manufacturers,” he said. “We’re all in this together and we are all focused on the stimulus package. We are talking to our members of Congress about a proposal crafted over the past several months that will fix both the supply and demand side of housing.”

"Over the next year, the stimulus plan will increase economic activity in every state as vacant homes are absorbed, households are able to relocate to new jobs, home values are stabilized and local property tax revenues return to their pre-recessionary levels," said NAHB Chief Economist Dave Crowe.

This year alone, Crowe said the plan would result in 200,000 additional new home sales, 1 million more existing home sales and a boost in expected housing starts from 649,000 to 908,000, on par with last year’s level.

In addition, the plan this year would create more than 539,000 jobs, generating $26 billion in wages and salaries, $21 billion in business income and $28 billion in federal, state and local tax revenues.

“The excess housing inventory in today’s market is the result of unprecedented foreclosures, not overbuilding. That’s why we support Sheila Bair’s foreclosure relief plan and any common-sense proposal to alleviate the foreclosure problem,” Howard said.

To underscore this point, he said that single-family housing starts as of November 2008 were at 441,000, the lowest level on record and a decline of 76% from the peak of January 2006. In addition, an increasing share of new single-family homes were being built under contract for the owner and not speculatively.

Under Bair’s plan, the federal government would provide $24 billion in loan guarantees that could help as many as 1.5 million home owners modify their existing mortgages and avoid foreclosure.

Putting the situation in starker terms, Crowe said that barring any significant federal action, 4 million strapped borrowers could lose their homes this year. “There are at least 1.5 million excess empty homes on the market today. That does not include homes people live in and want to sell,” he said.

In order to stabilize the marketplace and put a floor under declining home values, NAHB and the Fix Housing First coalition are calling on Congress to pass short-term, targeted incentives that spur demand and encourage Americans to buy homes.

Specifically, a temporary, expanded home buyer tax credit is needed to reduce excess inventory and encourage fence sitters to enter the market. The Fix Housing First legislative proposal calls on Congress to enact a stimulus plan that would reduce mortgage interest rates to as low as 2.99% on 30-year fixed-rate conventional loans purchased between Jan. 1, 2009 and June 30, 2009. The interest rate would be 3.99% for contracts that close between July 1, 2009 and Dec. 31, 2009.

At the same time, lawmakers need to make the current $7,500 home buyer tax credit much bigger and better, eliminating its current recapture provision and making it available to all purchasers. The coalition is calling for a credit amounting to 10% of the home’s price, capped at 3.5% of local FHA loan limits. This would range between $10,000 and $22,000.

The key is basing the credit amount on prices in each locality.

“Obviously, you don’t need a $22,000 credit in Bozeman, Mont. but a $22,000 credit will just get you into the marketplace in California,” said Howard.

Given the severity of the housing and economic downturn and short time frame for Congress to craft its stimulus package, Howard told builders that it was imperative for them to find out where their representatives and senators stand on the Fix Housing First stimulus proposals.

“We need a yes or no answer: Are you with us or not? Helping Wall Street and unions in Detroit doesn’t do anything when Main Street is left holding the bag. Let’s fix housing first,” he said.

The tax credit and interest rate buy-down are not new ideas, Howard added. “Congress enacted a similar housing solution in the mid-1970s when the nation was in recession. The plan led us out of recession then, and it can do it again.”

Bolstering the visits to Capitol Hill, more than 20,000 telephone calls and e-mails in support of the Fix Housing First proposal were received by the Congress from members of NAHB and the coalition.

Source: Nation’s Building News, NAHB

Vladimir Putin has recently announced that he will postpone the next step in his reform of the lumber tax regime designed to encourage domestic processing of timber. The proposed 80% export tax on wood will now be put off until the Autumn of 2009.

Putin said that his motivation behind postponing the tax measure came after Scandinavian lumber mills and manufacturers pleaded with the Russian leader to put off the prohibitive tax measures until they could make alternative arrangements. The export tax hike would have meant the collapse of many Finnish wood-processing businesses leading to as many as 16,000 redundancies and exacerbating the effects of the downturn in Finland. However it's more likely that Russia's plan to build the 1,200km long ‘Nord Stream’ natural gas pipeline connecting Russia directly with Germany may be closer to his actual motivation. Russia must gain permits from Finland, Sweden, Denmark and Germany to move ahead with plans. Russian workers will begin building the pipeline in 2010, with the aim of finishing the build by the end of 2011.

Finland has subsequently taken steps to decrease its dependence on Russian wood since the initial rise in export tax back in mid-2007 from 6.5% to 20% – the Finnish Forest Industry Federation has reported more than 1,000 redundancies at two of the largest papermakers in Europe as a result.

Anne Brunila, who heads the Finnish Forest Industry Federation, said “[Putin’s announcement] doesn't solve the problem, it only delays it, and gives more time for adjustments.”

The next move by Putin was as part of a three-year plan to transform the industry from one based on exports to one based on both harvesting and processing timber domestically. Putin has pushed for the wood to be processed locally thus taking full advantage of Russia’s expansive natural resources and maximizing potential GDP.

The extra revenue generated by the 2007 tax hike was channeled into developing facilities within Russia with the aim of processing all of Russia’s lumber locally. The next rise on April 1 2008 saw duties increase by a further 5% to 25%. The increase in taxation was expected to bring increased foreign investment from foreign lumber mills to Russia with companies setting up shop in Russia and selling their processed wood locally in an effort to avoid the export tax. This would also increase Russia’s tax-take from companies who would be paying local income taxes. The Russian leader has also offered Scandinavian companies tax breaks to encourage them to relocate their operations within Russia.

Before the first increase in the export duty, when taxation was levied at 6.5%, Finland accounted for 16-18% of Russian timber exports with China buying between 53-60% annually. The increased levy has had a significant effect on trade between the three countries – Finnish imports between January and August of this year, when compared with last year, have decreased almost two-fold from 18.2 million cubic meters of lumber to just 9.8 million.

However the decrease in exports was not capitalized upon by Russian companies – holdbacks in the development of Russian processing factories, according to Russian experts, meant that the lumber, which would have previously been exported, lay rotting in Russia. Despite this, Putin refused to revoke the tax.

Although Putin’s tax regime is set to heavily damage the Finnish timber processing industry, Canadian loggers were delighted with the proposal as it would have led to a massive increase in demand for Canada’s growing lumber stockpiles. China, which is heavily dependent on Russian wood, is currently negotiating deals with Canadian loggers although the loggers will now have to wait until next autumn to reap the rewards.

Pat Bell, British Columbia’s (BC) Forest Minister, said that once the proposal is in place no Russian wood will enter China unless it is legally harvested timber therefore leaving a gaping hole in supply. He said the Russian President's decision to postpone was ‘disappointing’ but by no stretch of the imagination the end of the world, adding that talks between BC and China had continued despite the Russian leader’s decision. He concluded that he expected trade between China and BC would increase from 2.3% of their total imports last year to at least double that figure this year. That figure is expected to rise rapidly after the 80% tax is enforced as law. He described the Russian decision to enforce a prohibitive export tax measure on wood as a welcome development that would increase investment and jobs in BC, and help Canada as a whole to offset the effects of the global economic crisis.

Finland has subsequently responded to the proposed punitive export tax regime by preparing countermeasures that will enforce taxes on Russian imports travelling through Finland. According to the Finnish Customs website one third of all Russian imports by value passed through Finland last year – equal to seven in every ten trucks travelling on Finnish motorways – a figure which grew by 25% year-on-year. The Finnish government plans to table a proposal early in 2009 which will charge vehicles a fee for bringing imports into Russia through Finland. It is hoped that this will offset the effects of the 80% tax on the Finnish economy.

PriceWaterhouseCoopers Global Forest and Paper Industry: Net Earnings Summary — Canada Hit Hard
This net earnings summary provides a regional comparative analysis of the forest and paper sector’s financial performance for the three-month period ending September 30, 2008.

Forest products companies in the US were the only group in this report to turn in an aggregate positive net earnings - US$808 million, down from US$957 in the same period of 2007. Two of the nine US companies reported improved earnings during the period in spite of difficult market conditions.

The six European-based forest products companies in the report incurred an overall net loss of US$314 million, down significantly from US$275 in profits the previous year.

In South America and South Africa the four largest producers reported combined losses of US$407 million in the third quarter of 2008, a major drop from combined positive earnings of US$503 million in the same period of 2007.

Canada’s forest and paper industry continued to be hit hard by the slumping US housing market, restructuring and asset impairment charges. Western and Eastern Canadian producers reported losses totaling US$529 million during the third quarter of 2008 versus US$173 million in losses during the third quarter of 2007.

The summary is prepared by PricewaterhouseCoopers from financial statements issued by the companies noted. All figures are in US dollars and compared with figures reported the three months ended September 2007.

Click here to view the report from PriceWaterhouseCoopers.

BlueLinx Holdings Inc. could buy back as much as $10 million worth of its own shares over the next two years.
The Atlanta-based building materials distributor’s board approved the share repurchasing plan as part of its effort to cope with the slumping construction industry and the overall economic downturn.

“We believe the company's shares, particularly in light of recent market developments, are undervalued and represent an attractive investment opportunity and the repurchase of our shares is a good use of our corporate funds and is in the best interests of our shareholders,” president and CEO George Judd said.

BlueLinx shares opened Dec. 23 at $1.14 per share, 12 cents over its 52-week low; its 52-week high reached $7.54 per share.

The company’s largest shareholder, private equity giant Cerberus ABP Investor LLC, will not participate in the buyback program, BlueLinx said in a statement.
Source: Industrial Distribution
www.inddist.com

Building Materials Holding Corp. (BMHC) will change its corporate headquarters address from San Francisco to Boise, Idaho.

The move, effective Jan. 1, is a reaction to what the company calls a “severe cyclical downturn in the home-building industry.”  

In a statement, BMHC said the existing San Francisco headquarters office will be closed, and the company will maintain only a small office in the San Francisco Bay Area. The company’s new address is 720 Park Boulevard, suite 200, Boise, ID, 83712.

The pro dealer posted a $45.2 million loss in its third quarter, which ended Sept. 30.

Fiber Composites, maker of the Fiberon brand of decking, will merge with Sensibuilt Building Solutions, a manufacturer of PVC decking and siding, the two companies have announced. Pegasus Capital Advisors, which held a majority stake in Sensibuilt, will be investing in Fiber Composites and will retain a minority interest in the post merger company. Other details of the transaction are expected to be worked out in the near future.

Sensibuilt, which launched a line of PVC decking and siding in 2007, will add its brands to Fiber Composites, the maker of Fiberon decking and railing and Enclave fencing.

GFI Business Solutions proudly announces the nomination of ;Reginald Howatson as SCOOPSOFT™ Senior Business Development Executive for Canada and the United States, as of September, 9th 2008, thus taking over from Suzanne Gosselin who is no longer with the company.

Reginald has been in a Business Development role in other divisions within the company for over five (5) years prior to joining the SCOOPSOFT™ team. His 15-years experience in ERP sales and Marketing ensures his understanding of the business needs in the manufacturing industry, as well as the system functionalities required to provide the appropriate solutions.

First presented in 1980, the NAWLA Mulrooney Award has been given to 28 individuals for exemplary service to the North American forest products industry and the community at large.  Award recipients are people who exemplify the highest standards of honor, integrity, innovation, activism, community service, leadership and like qualities within the industry. The award is dedicated to the memory of John J. Mulrooney, 1916-1979, whose 20 years of distinguished service as executive vice president of NAWLA helped turn NAWLA into a viable and potent force in the lumber industry.

The NAWLA Mulrooney Award is presented at the NAWLA Executive Conference in April.

The award itself is a magnificent, hand-crafted eagle carved from the most precious of woods, symbolizing the freedom, basic to North America, that each of its recipients has exercised in pursuit of the highest values of family, country, and business.

If you know someone you think may be deserving of this prestigious award, visit the NAWLA website to obtain the nomination package. More information and the nomination form can be found on the NAWLA website at www.nawla.org.

Back by popular demand, NAWLA is offering The University of Industrial Distribution (UID) which has sold out for the past five years!  The NAWLA UID will be held at Indiana University / Purdue University, March 8-11, 2009. With over 500 participants from more than 30 distribution associations, you will want to reserve your place at this signature program by registering now!

Through NAWLA's partnership with a consortium of more than 35 distribution associations, the UID is available to NAWLA members.  

• Choice of 36 different concentrated educational sessions focused on the unique needs of wholesale distribution industry
• 23 professional instructors from distribution, sales management, personnel productivity, leadership, negotiation, purchasing, finance and more

Who should attend:

Branch Managers
General Managers
Sales Managers
Marketing Managers
Purchasing Managers
Human Resources Managers
Senior Executives

UID

The University Place Conference Center & Hotel
Indianapolis, IN
March 8-11, 2009

Tuition - NAWLA Members $995

SPACE IS LIMITED!  REGISTER NOW

This program has sold out the last 5 years!

NAWLA Regional Meetings provide an excellent opportunity to network with area colleagues on the latest trends and critical issues affecting you and your company in your region.

$89 / Person Includes:
Reception and Dinner
Keynote speakers (Industry Specific)
Networking Opportunities with your peers
Discussions on issues which affect your region

Click Here for the NAWLA Regional Meetings Registration Form

Become a Sponsor of one or more of our Regional Meetings. Sponsorships are available in a wide range of affordable sizes.

NAWLA Regional Meeting Sponsorship Form

Mark your calendars for the following upcoming NAWLA Regional Meetings:
NAWLA Regional Meeting
February 10, 2009
Statesville Country Club
Statesville, NC

NAWLA Regional Meeting
February 19, 2009
The Wynfrey Hotel at Riverchase
Birmingham, AL

NAWLA Regional Meeting
March 31, 2009
The Portland City Grill
Portland, OR

NAWLA Regional Meeting
April 2, 2009
Vancouver Club
Vancouver, BC

NAWLA Regional Meeting
April 2, 2009
Specific Date and Location TBA
Boston, MA

NAWLA Regional Meeting
May 2009
Specific Date and Location TBA
Southern California

Registration forms for each meeting will be sent to you approximately four weeks prior to each meeting.

Before looking forward, let’s take a look at the 2008 NAWLA Traders Market®. Simply stated more attendees and exhibitors in 2008 than in 2007 felt that it was once again a “great show” (over 93 percent of attendees and exhibitors in 2008 versus 70 – 80 percent in 2007). The new online surveys also revealed the following:

• More than 80 percent of attendees and exhibitors agreed that the show should be closed earlier on Saturday.
• Most NAWLA attendees and exhibitors are satisfied with 4 show hours on Friday and 4 show hours on Saturday.
• In general, the receptions and Grand Opening Luncheon were well attended. The Sunday events (Lumber Traders Happy Hour and the “new” Bloody Mary Breakfast) were not as well attended.
• Over 50 percent of attendees attended the General Session with Coach Mike Ditka on Thursday.
• Half of the attendees agreed that the Thursday programming on the Green Building Movement was a “good” idea.
• Both attendees and exhibitors would like to see sessions on the following industry topics: Changing Distribution Channels and Housing Markets.
• The online format for the survey yielded more respondents than the paper distribution of surveys in 2007.

2008 certainly had it all with 1452 full registrants, 289 exhibiting companies, Chicago’s own Coach Mike Ditka, a CNBC Contributor, complimentary tours of the Chicago Board of Trade building and CME Group and educational offerings on credit and the green building movement. Now the challenge will be how does NAWLA top that in 2009?

If you completed the online 2008 Post-show Survey, thank you for taking the time to share your insights with the NAWLA Traders Market® Committee. Since November, the committee has been actively engaged in reviewing the survey results and planning a top-notch event in 2009. Once again, the Committee hears you and they are already working hard to meet your needs as exhibitors and attendees for 2009.

The NAWLA Traders Market® Committee is planning the final details for the November 5-7, 2009 Chicago show. They will do all they can to hold the line on the costs of the event and continue to provide what they feel is the absolute best value in the business for your dollar and your time.

For up-to-date information regarding the 2009 event, please visit www.nawlatradersmarket.com or contact NAWLA at (847) 870-7470.

Welcome NAWLA’s newest members for the month of December

Verifiers:
Dave Pollock, Bakerview/Pat Power
Derik Pallan, Howe Sound Forest Products

Saran Cedar Ltd. is a Manufacturer of Western Cedar Products & SPF who does 80% export to overseas markets and  20% North America.  The company also has sister company called Stiltly Wholesale.

Ainsworth Lumber, the Vancouver, B.C. producer of oriented strand board (OSB) and other building materials, has extended the shutdown of its two OSB plants in Minnesota, according to the Associated Press. The facilities in Bemidji and Cook, which were idled in October, will remain closed for the foreseeable future, the wire service reported. Approximately 280 people lost their jobs.

Building Material Distributors, Inc. is proud to announce the promotion of Chris Martin to Regional Sales Manager of California and Northern Nevada for the Marvin Windows & Doors division. Chris joined the company in 1994 and most recently held the position of BMD’s Marvin Northern California Sales Manager.

“We are excited to have Chris Martin lead the California Marvin sales team,” said Mike Garrison, VP of BMD’s Marvin Division. “Chris is well respected and known for his “roll-up your sleeves” approach to servicing our customers.”

Plum Creek Timber has promoted Tom Ray to VP-Montana operations. In his new role, Ray will oversee Plum Creek’s 10 manufacturing operations, one of which is in Meridian, Idaho. He will also oversee management of the company’s timberland resources in Montana. Ray will continue to be based in Columbia Falls and will report to Hank Ricklefs, VP-northern resources and manufacturing.

“For years, Tom has been an integral part of Plum Creek’s management team in Montana,” said Ricklefs. “Tom has extensive experience integrating our forestry activities with our manufacturing plants and has the expertise to successfully guide Plum Creek’s manufacturing business through these challenging times.”

Ray joined the Seattle-based company in 2001 when it merged with the Timber Co. (formerly part of Georgia-Pacific). Prior to his new position, he served as general manager, northwest region. He was also a business analyst and resource manager for Northern California lands. He has a bachelor of science degree in forest engineering from Oregon State University.

Both motor carriers and trucking’ suppliers cut jobs during 2008 to help streamline operations as a weak marketplace cut deeply into profits. However, the number of layoffs has climbed still higher over the last few weeks.

YRC Worldwide’s efforts to further integrate its two largest subsidiaries, Yellow Transportation and Roadway, includes eliminating nearly 1,000 positions across the U.S by March 1st, which the company  called an attempt to reduce duplicate functions.

Both motor carriers and trucking’ suppliers cut jobs during 2008 to help streamline operations as a weak marketplace cut deeply into profits. However, the number of layoffs has climbed still higher over the last few weeks.

YRC Worldwide’s efforts to further integrate its two largest subsidiaries, Yellow Transportation and Roadway, includes eliminating nearly 1,000 positions across the U.S by March 1st, which the company  called an attempt to reduce duplicate functions.

According to the St. Louis Business Journal, YRC confirmed yesterday that it would lay off 771 employees—309 in Tannersville, PA; 95 in East Petersburg, PA; 207 in Lancaster, PA and 160 in Oak Creek, WI. The company also said last week that it would shift its Kernersville, NC, operation to Charlotte, eliminating an additional 210 jobs, although many of the affected employees will have the opportunity to transfer, the Journal said.

The cuts at the nearby East Petersburg and Lancaster facilities would eliminate approximately three-quarters of the jobs at YRC terminals in southern Pennsylvania, the Lancaster New Era reported. In addition, YRC is asking its remaining union workers to approve a 10% pay cut and skip cost-of-living raises for the next four years, the New Era said.

In addition, the Roadway Express facility in West Seneca, NY will close on March 1st, according to the Buffalo News, as the company will consolidate its functions into the Yellow Transportation facility in Tonawanda, NY. YRC said that some of the 198 union, hourly and clerical employees at the West Seneca location could be transferred, but would not comment on how many, the News said.

Ryder System announced in December it would eliminate 3,100 jobs. While the majority of the layoffs were due to discontinuing its supply chain operations in Brazil, Argentina and Chile, nearly 700 of the positions are in the United States.

“The company believes deteriorating global economic and financial conditions will continue to negatively impact commercial rental performance, used vehicles sales, the automotive sector, and pension plan returns in 2009,” Ryder said in a statement.  “The planned workforce reduction is expected to result in cost savings of approximately $36 million in 2009, which will partially offset the impacts of these significant challenges. Ryder will also be significantly reducing the use of contractors and temporary employees, where appropriate, throughout its operations.”

Manufacturers that supply the trucking industry are also trimming workforces. Engine maker Cummins Inc. announced last month that it would reduce its worldwide workforce by at least 500 employees, offering compensation packages to a number of the affected employees, the company said.

“Cummins already has taken a number of actions across the company to try to bring costs in line with our reduced current demand and to meet the expected challenges of 2009,” said chairman & CEO Tim Solso. “Despite those efforts, we have now reached a point where we will have to take more significant steps to reduce our professional workforce around the world.”

Approximately 100 of the workers were from Cummins Emission Solutions’ plant in Mineral Point, WI, according to CNNMoney.com. The factory, which produces diesel particulate filters for emission control systems, now employees 480 workers.

Truck OEM and engine builder Navistar has cut 200 jobs from its Chatham, ON plant, scheduled to take effect March 1st, according to the Canadian Press. When coupled with the 490 layoffs announced in November, only 180 employees will be left at the facility.

Even top managers are feeling the pinch, as ArvinMeritor will cut pay for 100 senior executives, including CEO Chip McClure, by 10% effective January 16th, Reuters has reported.

Source: Fleet Owner

Website: www.fleetowner.com

By: Justin Carretta, online news editor

Building products purchasing is expected to fall

Analysts see big slide in housing starts and other construction

According to a report released today by RSM McGladrey, executives of U.S. wholesale-distributors have altered their growth and operational strategies to offset sector weaknesses and the rising costs of doing business, mainly associated with labor and energy.

RSM McGladrey’s Distribution Industry Report was extracted from the results of the firm’s 2008 Manufacturing and Wholesale Distribution National Survey conducted earlier this year. More than 960 industry executives, including 303 Distribution executives from 284 companies responded to the survey.

According to the survey, business conditions for many distribution companies have declined. Thirty-eight percent of those surveyed described their companies as “thriving and growing,” a decline of 21% from RSM McGladrey’s 2006 survey. However, many executives retain some measure of optimism, as 45% reported their company as “holding their own.”

Economic concerns have caused many distribution companies to alter their growth strategies for the upcoming year. Increasing brand recognition is the most popular growth tactic cited, increasing from 44% in 2007 to 49% this year. Strategies that saw a sharp decline – according to the survey – include vertical integration, creating private label products and growing with large retailers.

Mergers and acquisitions have also been a prominent growth strategy in the past, but executives that plan on engaging in such activity dropped from 48% in 2007 to just 18% in 2008. This is most likely due to the tightened credit markets in the U.S., as well as lower valuations.

Distribution companies, inherently dependent on logistics and billing, have increased their spending and reliance on information technology (IT). Eighty percent of distributors report that IT is increasingly critical to their business, while 75% plan on expanding the use and functionality of existing systems. More than half of respondents indicated that their companies plan to align their IT strategy with their business plan (66%), implement new technologies (55%) and train employees to use their current systems more effectively (53%).

Despite the importance of IT to the distribution industry, the survey indicates that many companies have significant weaknesses pertaining to risk management. Almost 25% of executives surveyed do not have effective disaster recovery systems, test their network security at least once a year or expect to increase their spending on information security.

Some of the ways that companies are combating changes in costs include looking at self-insurance, especially those in the $100 million to $500 million revenue size. While in the past larger companies have used self-insurance as a way to approach plan administration costs, smaller companies are now exploring self-insurance, as well.

Companies are also looking at wellness programs as a way to combat healthcare costs, according to the survey. Over 60% of companies with more than $500 million in annual revenues report that they employ a wellness program, while only 18% of companies with less than $25 million in revenue implement such a strategy. Disease management programs are also utilized.

Many distribution companies are also embracing green initiatives. Almost half of the largest distributors, as well as many smaller companies are being asked by their customers to become more environmentally-friendly. But many companies have also taken such steps on their own, with 38% of executives reporting a reduction in non-recyclable waste and 23% eliminating the use of certain chemicals.

The complete RSM McGladrey 2008 Distribution Industry Report is available here.

Source: Modern Distribution Management
Website: www.mdm.com

A recent article in McKinsey Quarterly defines one of the key values that distributors offer to manufacturers in terms of getting a product efficiently into markets that are fragmented, either geographically or by size of industry or company. It serves to remind us that the local knowledge of a distributor of its market and customers is its greatest asset.

The article looks at the high-tech industry – companies that make computing, telecom and networking equipment. They have in recent years sold directly to customers or to resellers online or through their sales forces and have become less dependent on traditional distribution partners. But as OEMs look for growth in new markets, this article contends that they should "take a closer look at the value offered by some distributors – particularly those known as two-tier distributors – so named because they buy from manufacturers and sell to resellers." Especially in the developing world, distributors can help manufacturers sell to small and mid-size companies.

Some of the benefits outlined in the article:

• Cost of a manufacturer's direct sales force is "prohibitive" compared with using a distributor.
• Distributors that sell multiple brands can gain scale and serve markets more effectively.
• Smaller companies prefer to buy from distributors.
• Local distributors are better at assessing credit risk in emerging markets and can finance smaller deals.
• Local distributors can better forecast local sales in emerging markets.

Read the article here.

Source: Modern Distribution Management

In San Francisco, where Mayor Gavin Newsom recently signed a bill requiring all new construction to meet green building standards starting in 2012, the city’s chief building inspector, Laurence Kornfield, says it’s not just in California where things are changing. Building codes across the country are undergoing a sea change.

“Every aspect of the building code is currently up in the air,” Kornfield says. Starting at a national level and reaching all the way down to local municipalities, building codes are being examined and changed, often in an effort to require that new construction be built to green building standards.

While 2007 and 2008 proved big years for the widespread adoption of stricter green building standards by major cities—including Los Angeles, Boston and Seattle—the coming year is expected to bring even more. And while the trend has traditionally applied to government-owned buildings, the early adopters of green building standards, such as San Francisco and Portland, are starting to build green building measures into code for all commercial buildings. 

But updating building codes is not an easy task. In Albuquerque, N.M., for example, a new green building code set to become effective Oct. 1, 2008, was placed on hold when the Air Conditioning, Heating and Refrigeration Institute and several distributors sued Albuquerque, alleging the code would have created energy efficiency standards for furnaces, water heaters and air conditioners that were more stringent than those allowed under Federal law.

“Codes have worked fine for years,” says Diane Sugimura, director of Seattle’s Department of Planning and Development. “But there’s all sorts of new things coming [down the pike] that may or may not work within existing code.” She points to increased interest in curbing global warming and investing in green building as factors that are bound to change code.

About half of the nation’s built environment is expected to be constructed between 2000 and 2030, according a 2004 report released by The Brookings Institution. This means some 213 billion square feet would come online by 2030. If the numbers are correct, it’s an unprecedented opportunity to change how buildings in the United States affect the environment. “This is the biggest thing in the building code world right now,” Kornfield says. “It covers every area from plumbing to the electrical code and the mechanical code and the building code.”

In the past year, a few jurisdictions and the national standards organizations started looking into updating building codes to reflect a growing interest in green building measures. And it’s no surprise that California, with its strict energy efficiency standards for appliances and ensuing cap-and-trade program for monitoring greenhouse gas emissions, is leading the way.

San Francisco’s new codes are thought to be the strictest green building requirements in the nation. They are expected to reduce carbon dioxide emissions by 60,000 tons annually, and save 220,000 megawatt-hours of electricity and 100 million gallons of drinking water each year. The state of California’s Building Standards Commission became the first jurisdiction to approve market-wide green building codes when adopted by the California Green Building Standards Code in July.

And the California Energy Commission in 2008 adopted progressive recommendations that all new homes be zero energy—or produce as much energy as they use—by 2020, and all new commercial buildings by 2030. Similar efforts around the nation are expected to gain momentum in the coming year, and the West Coast is a focal point for the movement.

In Portland, a group has been meeting regularly for the better part of a year under the auspices of the city’s Bureau of Development Services to examine how to incorporate pieces of the ASHRAE 189.1P Standard for the Design of High-Performance Green Buildings into city code.

“Portland likes to see itself as a green city,” says Lori Graham, codes specialist at the Bureau of Development Services. “In part because of the perception that building codes are a barrier to that greenness, a question came up… ‘Well if you want to affect change, you need to change the building code.’” The city released its new green building policy for public comment on Dec. 2, 2008.

The U.S. Green Building Council (USGBC) worked with ASHRAE on Standard 189.1P, which is America’s first National Standard developed to be used as a green building code. Standard 189.1P serves as a guide for states, localities and other building code jurisdictions that want to create green building requirements for all commercial buildings.

But, as Kornfield notes, most small cities and planning departments will not adopt their own codes because of their size. Most places, he says, adopt the national code, which is why it is so important that the national code be updated as well. Kornfield cautions that the new codes coming to fruition in California are likely just one step on what will be a very long road.

“It’s not all going to happen in 2009 just like it didn’t all happen in 2007 or 2008,” Kornfield says. He says he believes the world of building codes traditionally looks backwards, which means the process will proceed with caution.
“The green building frontier requires that we be prospective and look at issues that might be problems in the future,” he says. “It’s different for people who have worked in a retrospective environment to put these issues into a framework that allows them to understand prospective issues.”

Building that framework takes flexibility from all sides, says Laurie Schoeman, project manager of Ecocenter at Heron’s Head Park which will house what she says is San Francisco’s first Living Machine. Finding an entity that was willing to be the regulator for the project was a two-year-long process in which she convinced a local agency to step in.

“You can establish new best practices by looking at old best practices and bringing them into the fold,” she says.
Source: Sustainable Industries

www.sustainableindustries.com
by Charles Redell

Ed Rigsbee, CSP and the author of PartnerShift, Developing Strategic Alliances and The Art of Partnering shares with us his partnering thoughts in this New Year.  Life can be quite challenging when your expectations are not met.

What are your expectations for the New Year?

Expectations come in all forms, for your business, for yourself and for others, just to name a few. Your behavior choices set both an example and expectations.

What behavior decisions will you rethink?

It is the behavior decisions in our lives that determine our achievement, not the perceived limitations. With this said, what are the possibilities for the next thousand years? Who knows? More importantly, what are your possibilities for the next twelve months? You are accountable to fulfill your own expectations. As a business owner, manager or executive, you also are accountable to assist your employees in achieving their expectations.

What will you do differently in the New Year?

 Frequently, in my seminars, I’ll tell attendees that the definition of insanity is doing what you’ve always done but expecting different results. The dawning of every New Year is a wonderful opportunity to make new behavior decisions. The break makes change psychologically easier. The subconscious accepts the new decision easier.

What new behavior decisions will you make?

 High on my list of recommendations is adopting the behavior I like to call the Partnering Paradigm. This is a paradigm of synergy through cooperation. It applies to your business expectations both externally and internally. It also applies to your external and internal personal expectations. In business, seek external partners to develop strategic alliances. Select partners that have complimentary core competencies to those of your company. This will give all involved the best chance for developing synergies that will create value. Internal to your company, look for new strategies to help your employees have the Emotional Ownership necessary to act as if they were an owner, to take intelligent risks essential for business growth. See my article titled; Praise for a Job Well Done (www.rigsbee.com) for low and no cost employee recognition ideas.

 To help your employees develop alignment with your vision, find your company’s stories. Look for your stories that illustrate the behaviors you wish to be repeated. Retell these stories regularly to reinforce desired behaviors. Make the stories part of your culture. Achieving a successful shift in company culture takes time, please be patient.

What changes would you like to make in your company’s culture?

 The decision to adopt a new Partnering behavior can create enormous value in many areas of your life. In business, new synergies (the sum of the whole is greater than the sum of the parts) will become possible. These synergies will become evident both externally and internally.

So, what are your expectations?
Will you resolve to make the behavior decisions necessary to satisfy your expectations?
What are my expectations?

I’ll tell you. This year, I expect to double, from last year, the number of people I help in making new and different behavior decisions for their lives. I wish you the best of success in making notable behavior decisions.
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The holiday season and end of year is the time to officially thank employees for a job well done. But with the economic downturn, and responsibility for the bottom line now a top priority, finding ways to be creative and respectful is critical to keeping employees motivated and loyal. Here are 10 low-budget and no-budget (bupkus) ideas to express thanks and show appreciation without breaking the bank.

1. Fireside Mug Sets. Buy mugs or jars and fill with favorite or various hot drink packages. From hot chocolate with marshmallows to herbal teas or coffee samplers for them to relax at home. Tie on a tag with a personal note expressing thanks for a year well done.

2. Pen & Paper Set. Have custom note cards made with employees' names, or with inspirational artwork, and include a pen. Write an expression of thanks to each employee being specific on how they, or their department, made a difference.

3. Give Some Paid Time Off. Even a half-day vacation to do holiday shopping may be a wonderful gesture to give to employees on a rotating basis. Send them out the door with your verbal best wishes.

4. Let Everyone Contribute. Have a traditional pot-luck holiday party where every employee brings a favorite dish and where management gives recognition speeches. Try some open-mike talent for employees, department "Secret Santa" exchanges, music played from computers, etc. Company costs would be to share party expenses in drinks, paper goods or a nominal employee giveaway.

5. Strike a Tune. Purchase a favorite and meaningful book or music CD for everyone. Enclose a personal note telling why you chose this because of the particular meaning or sentiment it has for you that you want to share. Find a fitting bookmark to top things off.

6. Spread the Cheer. Trade out your company party to create a party for others in the community. The same way you might have done your office party (by department, floor or company-wide) change it to be an organized and meaningful volunteer gathering. Led by your CEO or department head, plan a meal, serve a meal at a food bank, offer care or entertain at a nursing home or another place of people who could use cheering.

7. Get Cooking. Publish a favorite holiday recipe book in print or online. Get everyone involved in this project. Compile employee submitted holiday favorite recipes and have them printed up and bound or create a Web site on your intranet for everyone to view. If employees are on board, create a calendar where you group together recipes for employees to make for everyone to try and enjoy.

8. Make Some "Thankful" Boxes or Bags. Decorate boxes, or make some classy tie bags, and have employees write on colored cards one reason they are thankful for their colleagues. Put the cards inside the respective employee's box or bag. Make sure bosses understand the importance of setting an example.

9. Capture Memories in Pictures and Words. Request pictures of the past year's company events and meetings, BBQ's and other personal employee events—such as baby photos, etc.—and have someone on staff create a photo presentation, complete with titles and explanations. Save it to a CD and duplicate to give to everyone. You can even include an audio or video-recorded greeting and message from the company president or CEO.

10. Customized Employee Cookies. Work with a local baker to create some gourmet cookies and personalize a baker's dozen worth with "Thanks…" and each employee's name. Have the cookies presented in a decorative tin or in seasonally embossed cellophane wrap.


INCENTIVE online columnist Roy Saunderson, author of Giving the Real Recognition Way is President of Recognition Management Institute (www.realrecognition.com) which consults with companies on improving employee motivation leading to increased productivity and profits. He can be reached at RoySaunderson@realrecognition.com.

By Roy Saunderson
Source: Manager Smarter, Website: www.managesmarter.com