Vol. 8, No. 6 – March 17, 2009

The National Lumber and Building Material Dealers Association (NLBMDA) is calling on members of Congress to oppose the so-called “Employee Free Choice Act,” which was introduced in the U.S. House of Representatives and Senate last week. The association has designated the issue as one of the priority issues NLBMDA members will discuss with their members of Congress during the association’s annual Legislative Conference.

“At a time when our economy is struggling and the housing market continues to have many challenges, the Employee Free Choice Act will destroy jobs and hobble businesses that are already struggling in this recession,” said NLBMDA President and CEO Michael O’Brien.

The legislation, also known as “card check” legislation, bypasses the official secret ballot election and instead allows for recognition of the union as the bargaining representative once it presents authorization cards signed by a majority of workers that the union is seeking to organize. If a majority of employees sign the cards and the employer and the union do not reach agreement after 120 days of collective bargaining and mediation, a federally appointed arbitrator will be selected to write the terms and conditions, which would be binding for two years.

“The secret ballot election is a pillar of established labor-management law. This legislation is an undemocratic attempt to overturn decades of established law,” said O’Brien.

A recent economic analysis conducted by Dr. Anne Layne-Farrar, an economist with the nonpartisan research firm LECG Consulting, concluded that for every 3 percentage points gained in union membership through card checks and mandatory arbitration will result in a 1 percentage point rise in the unemployment rate the following year.

ENERGY STAR WEB SITE DETAILS STIMULUS TAX CREDITS

Prior to enactment of the recent stimulus package, the law provided a 10 percent credit for the purchase of qualified energy efficient improvements to existing homes. A qualified improvement is any energy efficient building envelope component, which includes insulation materials designed to reduce heat loss or gain, exterior windows, skylights and doors, and metal or asphalt roofs with appropriate pigmented coatings or cooling granules. The maximum credit for a taxpayer with respect to the same dwelling for all taxable years was $500 and no more than $200 of such credit may be attributable to expenditures on windows. The current credit was set to expire on January 1, 2010.

The recently enacted stimulus package increased the credit to 30 percent for tax years 2009 and 2010 and extends the credit to December 31, 2010. It also updates the building insulation requirements to follow the 2009 International Energy Conservation Code. Additionally, qualifying exterior windows, doors and skylights must have a U-factor at or below 0.30 and a seasonal heat gain coefficient at or below 0.30. Also, the $500 lifetime cap ($200 for windows) is eliminated and replaced with an aggregate cap of $1,500 for tax years 2009 and 2010.

The U.S. Department of Energy’s and the Environmental Protection Agency’s Energy Star website has complete information on taking advantage of these credits as well as others for qualified HVAC systems, water heaters and for home builders building energy efficient homes. Visit www.dealer.org for a link to the site.

Source: NLBMDA, March 10, 2009

SCOPE OF THE LBM INDUSTRY

NLBMDA has announced the publication of The Scope of the Lumber & Building Material Industry. This new publication explains why building material dealers operate the way they do and how they have evolved in response to the marketplace, noting valuable benchmarking data for all members of the building industry, especially in today's tumultuous economy.

The Scope of the LBM Industry Report will feature important qualitative data focused on fundamental practices, including:

How dealer businesses are structured
How dealers go to market
What kinds of customers dealers serve
What products and services dealers offer
Purchasing practices and inventory management
How dealers use technology

Prepared by Greg Brooks of The Building Supply Channel, the report also details important quantitative data on the state of the industry, including: Size of the industry; Number of companies; Geographical concentration; Number of employees; Payroll expenditures; Taxes paid; Sales by customer type; Dealer/retailer sales by product category; End use by end-user category; Employee productivity; Product line market share by dealer type; Inventory productivity; and Manufacturing capabilities.

Several trends are discussed including residential new construction, remodeling, consumer home improvement, and how the dealer channel is adapting to meet customers’ needs. Few outside observers recognize the degree of entrepreneurship, the unique work environment, and the breadth of career opportunities in this building supply dealer industry. It’s a tremendously challenging industry, combining elements of manufacturing, logistics, retailing, and construction.

Download an order form here: http://www.dealer.org/files/Scope%20of%20LBM%20Industry%20Order%20Form.pdf

PROSALES 100 SURVEY CLOSES TODAY!

If your operation topped $20 million in sales in 2008, it's not too late to participate in the ProSales 100 Survey, the industry's key report on America's biggest LBM operations. The survey remains online but the clock is ticking, and the survey will close on March 17. If your company wants to take part for the first time, or you did not receive a link to the survey, please contact senior editor Andy Carlo at acarlo@hanleywood.com or at 845-337-4347. Copies of the survey can also be e-mailed to you. The marketplace turmoil this past year makes the ProSales 100 even more vital as the industry's yardstick measuring the nation's premier building materials suppliers. Your participation will help assure that your industry gets the clearest possible benchmark of the state of things.

Remembrance

Carl H. Holekamp, Jr., a long-time member and past president, recently lost his wife of 58 years.

Carl was president and owner of Holekamp Lumber Company of Webster Groves, Mo. Barbara, his wife, passed away on February 15, 2009.

Carl currently resides at 3380 Lake Bend Drive, Apt. 336, Valley Park, Mo. (63088).

SAVE THE DATE

March 16-18 - NLBMDA Legislative Conference - Washington, D.C.

April 30-May 1 – MLA Swing-into-Spring Event – Lake of the Ozarks, Mo.

June 12 – Kansas Sunflower Shootout – Salina, Kan.

Nov. 5-6 – MLA Fall Fling – Kansas City, Mo.

Call the MLA Office – 800-747-6529 – for additional information or email: mail@themla.com

LUMBER NEWS – QUICK GLIMPSES

Obama’s Budget Hits Mortgage Interest Deduction… President Barack Obama on Feb. 26 unveiled a $3.6 trillion budget that would raise taxes on American families earning more than $250,000 and reduce the value of their mortgage interest and real estate tax deductions to help pay for a $634 billion health care fund for the uninsured.

Obama said this year's deficit would increase to $1.75 trillion and fall to $533 billion by the end of his first term and that his budget blueprint provides investments in health care, energy conservation and education to modernize the nation's economy in the long-term.

After the President announced his budget plan, NAHB Chairman Joe Robson issued a media statement highly critical of the Administration's proposal to reduce the value of the mortgage interest and real estate tax deductions for home buyers and home owners in order to pay for an expanded health care initiative.

Source: Nation’s Building News, NAHB, March 2, 2009

Lumber Futures Rise on Reports of Production Cuts… On Tuesday, lumber futures gained at the Chicago Mercantile Exchange in response to West Fraser Timber's projected production cuts, totaling approximately 44 million board feet. Some observers believe that the cuts are necessary in order to better align supply with reduced demand. Others, however, observe that the spring building season will soon arrive and productions cuts may help long-term prices.

Source: LBM Daily, March 4, 2009

Early Poll Respondents Indicate Dealers Are Getting Green… The first 125 respondents to ProSales' online survey on local green construction trends suggest dealers are getting more involved in this subject than anecdotal reports. Particularly impressive is the number of dealers going green in their own businesses, mainly by looking at their energy use.

Source: ProSales Business Update, March 4, 2009

Warren Buffett Addresses Housing Crisis… As Berkshire Hathaway posted its worst year in 2008, CEO and billionaire investor Warren Buffett offered warnings and advice for 2009. He also promoted "honest" down payments of 10 percent or more for house purchases.

“Commentary about the current housing crisis often ignores the crucial fact that most foreclosures do not occur because a house is worth less than its mortgage (so-called “upside-down” loans). Rather, foreclosures take place because borrowers can’t pay the monthly payment that they agreed to pay. Homeowners who have made a meaningful down payment – derived from savings and not from other borrowing – seldom walk away from a primary residence simply because its value today is less than the mortgage. Instead, they walk when they can’t make the monthly payments.”

Buffett further pointed to lessons that should be learned.

“The present housing debacle should teach home buyers, lenders, brokers and government some simple lessons that will ensure stability in the future. Home purchases should involve an honest-to-God down payment of at least 10 percent and monthly payments that can be comfortably handled by the borrower’s income. That income should be carefully verified.”

Source: Weekly Digest, Home Channel News, March 6, 2009

Wolseley Seeks to Sell or Dump Stock by August 1… Wolseley PLC revealed today that it is in the process of identifying a joint venture partner for Stock Building Supply, the second-largest U.S. pro dealer, or else will exit the business by Aug. 1. “A number” of unnamed companies are interested in acquiring all or part of Stock, the U.K.-based company said in a statement issued by Stock.

In a report released this morning, Wolseley said the decline in housing starts, coupled with a continued fall in lumber prices, have expedited the company's decision to pursue a sale or joint venture, or to dispose or exit Stock Building Supply, by Aug. 1. Wolseley also announced that it will try to raise 1 billion pounds ($1.42 billion) in a rights issue to help it avoid breaking banking covenants. Wolseley is said to have debts totaling 3 billion pounds.

Source: Andy Carlo, ProSales Magazine, March 6, 2009

Defective Chinese Drywall Is All Over U.S., Watchdog Says… Environmental testing sponsored by a national consumer group shows defective Chinese drywall has been found in homes in 41 states, says Americas Watchdog in Washington, D.C. The group says 250 million feet of the drywall came into the United States, through New Jersey and other ports during a building materials shortage from about 2004 to 2007.

The defective drywall emits sulfur compounds that corrode air conditioning coils, and damages other metals on items inside the home, including jewelry, chrome, silverware and copper wiring inside electrical outlets. But there is no documentation the drywall is an environmental hazard, threatens a species or is threatening water supplies, said Henry Slack of the EPA.

"Is it affecting people's health?" Slack said. "We don't know."

Source: NJBMDA Bulletin, March 9, 2009

New Rules Coming from IRS… The Internal Revenue Service (IRS) issued new payroll tax withholding tables to implement the Making Work Pay tax credit; employers are to begin using them no later than April 1. The tables and related instructions are at www.irs.gov and will be mailed to employers in mid-March.

The IRS also released information on claiming the new COBRA insurance premium subsidy, which was offered in the American Recovery & Reinvestment Act. Answers to frequently asked questions are at www.irs.gov/newsroom and a revised Form 941 quarterly payroll tax return is at www.irs.gov/pub. The agency is also working on information to define “involuntarily terminated” employees who would be eligible for the 65 percent premium subsidy.

Source: News from Washington, NRHA, March 9, 2009

Weyerhaeuser Shuts Down Mills and Service Centers… On Tuesday, Weyerhaeuser announced its plans to close mills in Evergreen, Ala.; Dodson and Simsboro, La.; and Chavies, Ky. In addition, the timber giant revealed it will shutter service centers in Albuquerque, N.M.; Cincinnati and Columbus, Ohio; and Las Vegas and Reno, Nev.

Source: LBM Daily, March 11, 2009

Bank Account Insurance... The House passed mortgage relief legislation which has at least one provision of interest to anyone with a bank account. The bill would make the $250,000 FDIC deposit insurance limit permanent. Under current legislation the $250,000 limit expires at the end of this year and reverts to $100,000.

Source: Washington Report, NRHA, March 16, 2009

Set driving expectations

Driving instructors estimate that a driver makes 200 decisions for every mile of driving.

A University of North Carolina study released by AAA showed that drivers were distracted 16 percent of the time they were driving. That’s almost ten minutes of every hour on the road! And, a recent National Highway Traffic Safety Administration (NHTSA) survey found that nearly 75 percent of drivers reported using their phones while driving, and an estimated 60 percent of cell phone use takes place behind the wheel.

How can you help prevent accidents caused by distracted driving?

Set expectations for your employees by implementing a company policy regarding distracted driving. Communicate that your company policy requires employees not to engage in activities that cause distractions, including but not limited to:

§ Using a cell phone

§ Using a computer or electronic handheld device

§ Adjusting the controls of a CD player or radio

§ Searching for items in the vehicle such as CDs and coins

§ Eating or drinking

§ Reading maps or other printed material

This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.

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